Shanghai copper shock upward short-term fundamental support is insufficient

On the macro front, China intends to propose countermeasures against the US will impose 10% tariffs on $300 billion of imports from China, and concerns about the slowdown in global economic growth caused by trade disputes persist.

Fears of a global recession have risen, and China's latest weak growth rate of industrial added value, and the growth rate of consumption and fixed asset investment have also declined, further increasing the downward pressure on the economy.
The 2-year and 10-year Treasury yields inverted for the first time since 2007, raising fears that
the U.
S.
economy would enter recession.
Global risk aversion reignited, and copper price rebound was limited
.

In terms of the market, in the week of August 16, domestic spot copper prices were weak and volatile
.
The average price of copper in Yangtze River nonferrous metal network 1# was 46528 yuan / ton, down 42 yuan / ton per day, and down 0.
45% on a weekly basis; The average price of the previous week was 46284 yuan / ton, up 244 yuan / ton compared with last week, up 0.
53%
from the previous week.

In terms of inventory, copper stocks unexpectedly increased sharply during the week, with a cumulative increase of 60,250 metric tons to 331975 metric tons, a cumulative increase of 22.
17%.

Shanghai copper stocks continued to rise, increasing by 6,463 tons, or 4.
13%, to 162,830 tons
.

At present, global copper stocks are gradually accumulating, and LME copper stocks unexpectedly surged by more than 22% this week, and the previous inventory shock rebounded, and COMEX stocks continue to recover
.
The operating rate of downstream copper processing enterprises is not satisfactory, new orders in transportation, home appliances, and power industries have weakened, demand for real estate home appliances and automobiles has not improved for the time being, and the terminal is still in the off-season
of consumption.
In addition, expectations of a global recession have heated up, China's industrial value added in July fell year-on-year, industrial production is facing increased downward pressure, and concerns about metal demand have dragged down copper prices
.

Copper Market News:

1.
On August 14 (local time), Codelco Chile officially started underground operations
at its century-old Chuquicamata copper mine.
The US$5.
5 billion project has 1.
028 billion tonnes of copper reserves and is expected to produce 320,000 tonnes of copper annually by 2026, after the open-pit mine closed
in 2020.

2.
A spokesman for the operator of Peru's port of Matarani said copper exports had resumed as anti-mining protests over the weekend blocked critical infrastructure in the country's southern copper belt
.
Shipments by the four largest mining companies, which account for about half of Peru's copper production, have been delayed for nearly three weeks
due to the turmoil.

Looking ahead, although the supply support of copper mines is still strengthening, industry analysts and industry leaders said that there may be a large supply shortage in the next few years, and the demand for electric vehicles and new technologies will increase sharply in the mid-2020s; However, at present, the supply of refined copper and scrap copper is relatively abundant, and it is difficult for terminal consumption such as automobiles, real estate, and air conditioners to recover for the time being, and overseas demand has also been affected by the consumption off-season, and there is a certain accumulation of domestic and foreign inventories, and the short-term copper fundamental support is insufficient
.
As the global recession is expected to heat up, related demand may be weaker, and copper prices are still difficult to say the bottom, and copper prices are expected to fluctuate next
week.