Shanghai copper rose sharply, supported by expectations of improved demand

Market focus: (1) In February, the US CPI increased by 0.
4% month-on-month, 0.
3% in the previous month, and 1.
7% year-on-year, in line with expectations
.
The US core CPI rose 0.
1% m/m in February vs 0% prior, below expectations of 0.
2% and up 1.
3% y/y vs.
1.
4%
prior.
(2) The $1.
9 trillion US stimulus bill was voted through the House of Representatives, and Biden is scheduled to sign
it on Friday.
(3) China and the United States will hold a meeting
at the level of senior diplomats in Alaska.
(4) My nonferrous data, in the week of March 11, the spot inventory of electrolytic copper in the Chinese market was 293,000 tons, an increase of 02,400 tons
from last Thursday.

Spot analysis: On March 11, spot 1# electrolytic copper was quoted at 65350-65750 yuan / ton, with an average price of 65550 yuan / ton, a daily increase of 30 yuan / ton
.
Yangtze River Nonferrous Metals reported that some traders tested the water at high prices, downstream consumption improved slightly, and the overall transaction was limited
.

Warehouse receipt inventory: Shanghai copper warehouse receipts totaled 92,564 tons on Thursday, a daily increase of 775 tons, an increase of 5 consecutive days; On March 10, LME copper stocks stood at 88,025 tonnes, up 2,975 tonnes
per day.

Main positions: the top 20 long positions of Shanghai copper main 2105 contract are 91473 lots, a daily increase of 8399 lots, short positions are 93628 lots, a daily increase of 8185 lots, a net short position of 2155 lots, a daily decrease of 214 lots, long and short increases, and net space decreases
.

Market research and judgment: Shanghai copper 2105 rose sharply on March 11
.
US CPI data for February was muted, indicating that inflationary pressures remain subdued and the passage of the US $1.
9 trillion stimulus package by Congress boosted market risk sentiment
.
Upstream domestic copper mine inventories continue to decline, and processing fee TC continues to decline, resulting in high smelting costs, and the recent risk of copper mine strikes in Chile has revived, and copper mine tightening concerns have increased
.
The performance of downstream domestic demand is still weak, but domestic inventories are still significantly lower than the same period of previous years; And with the arrival of the traditional peak season in March and April, downstream demand is expected to improve, and the recent signs of slowing inventory growth have strengthened support for copper prices
.
Technically, the Shanghai Copper 2105 contract sharply increased its position and rebounded at a low level, focusing on the 20-day moving average support, and it is expected that the short-term shock will be strong
.