Fundamentals still support Shanghai copper trend is relatively strong

Last week, London copper rushed back down
.
The average price of LME copper in the first four trading days was 7577.
25 US dollars / ton, up 1.
75 US dollars / ton per day; Last week's average price was 7653.
25 US dollars / ton, down 76 US dollars / ton from the previous month, a cumulative decline of 1.
0%.

In terms of spot, the consumption performance of the spot market is unsatisfactory, the downstream fear of heights is obvious, only a small amount of just need to be replenished, want to wait for copper prices to return to the purchase behind, so that in the face of high copper prices can not be moved upstream and downstream, coupled with frequent price adjustments by holders drag down spot transactions, making it difficult for consumption to improve too much, the overall market during the week to buy pieces is weak
.

On the supply side, Chilean copper production in September was 428,300 tons, down 4.
27% year-on-year; According to the monthly report of the International Copper Research Group (ICSG), the global refined copper supply gap is 292,000 tons, higher than the gap of 152,000 tons of copper enterprises last year; while the domestic copper mine supply is relatively loose, including 44 smelter samples, involving a total production capacity of 11.
88 million tons, covering 95.
6%.

。 At the same time, the data shows that the actual domestic output of electrolytic copper in October 2022 was 900,700 tons, an increase of 11.
5% year-on-year and 0.
4% month-on-month; Coupled with the spot TC price has risen to 88 US dollars / ton, smelting profits continue to rise, imported copper sand, refined copper, copper maintained a year-on-year high growth rate, overall supply is relatively stable, but spot tradable supply is still relatively tight, and global exchange inventories continued to decline to 226,000 tons at the end of October, down nearly 50% year-on-year, a decrease of 201,000 tons
.

In terms of demand, according to market feedback, the operating rate of major large and medium-sized copper rod enterprises in China decreased by 0.
29 percentage points from last week; copper prices remained high during the week, the increase in downstream cable orders was limited, the wait-and-see mood increased, and the pace of production slowed down; under the slowdown in factory activities in October, demand performance was not good, causing concerns about sluggish metal demand, coupled with the continuation of real estate fatigue, continuing to drag down copper metal consumption
.
However, in September, more than 1.
5 trillion yuan of infrastructure projects were intensively started, power grid investment continued to benefit, while new energy vehicles continued to be strong supply and demand, and production and sales continued to grow month-on-month in September, continuing to drive copper demand growth
.
On the whole, the demand side is weak feedback, and it is difficult to achieve bright improvement
in the short term.

The trend of Shanghai copper during the week was relatively strong, because Shanghai copper fundamentals were still supported, domestic and foreign inventories were still low, Peruvian copper mines interfered with supply concerns, Chilean production declined, and domestic spot deliverable was relatively limited, all of which formed a bottom support
for copper prices.
In addition, China insists on implementing a prudent monetary policy, giving the market greater confidence
.
And in the context of booming production and sales of new energy vehicles and high growth rate of infrastructure, power grid, and photovoltaic investment, domestic copper consumption performance is acceptable, although real estate fatigue restrains copper consumption, but overall, consumer demand is still resilient
.
Therefore, copper prices maintained a wide range of fluctuations, and Shanghai copper prices stabilized at 64,000 yuan / ton
.