The upward driving force of Shanghai copper is not strong and continues the weak trend

In terms of spot, on November 17, the trading price of Yangtze River spot 1# copper was 66690-66730 yuan / ton, down 440 yuan / ton; Liter 480 - liter 520, flattened
.
In the spot market, holders have a strong price sentiment, downstream replenishment willingness is not high, in the face of high copper prices still maintain a cautious wait-and-see, pessimistic attitude, receiver enthusiasm is not strong, the overall transaction is weak
.

In terms of inventories, as of November 17, London Metal Exchange (LME) copper stocks increased by 250 tons, or 0.
28%, to 89,925 tons; As of November 17, the warehouse receipt of Shanghai copper futures in the previous period was 59,025 tons, down 2,951 tons
from the previous day.

On the supply side, copper rod production in 2022 increased by 4% year-on-year, accounting for 53%
of total copper production.
The supply of recycled copper is tight, the substitution advantage of refined waste is weakening, the processing fee of refined copper rod is under long-term pressure, and the recycled copper rod has greater
elasticity due to its cost price advantage.
According to statistics, in 2022, the copper crude production capacity will be 480,000 tons, and the crude refining and reproduction capacity will be 150,000 tons; The new electrolysis production capacity is 1.
14 million tons, and the electrolysis resumption production capacity is 150,000 tons; It is expected to give 690,000 tons of new production in 2023; Coupled with the 300,000 tons of electrolysis capacity released in 2023, it is expected that the new output in 2023 will be 690,000-750,000 tons, an increase of 6.
8%.

On the demand side, due to the impact of the epidemic, some projects of State Grid and local infrastructure ports were moved to next year, and the delivery volume of State Grid fell seriously; Real estate has a downward trend in copper consumption, and short-term positive market sentiment is difficult to transmit to consumption ports; In the downward cycle of real estate, home appliance consumption declined, and the consumer electronics industry performed weakly
.

Copper Viewpoint: The US retail sales data for October showed better-than-expected growth, indicating that US consumption is still resilient, and higher inflation may be swept in again, cooling expectations of a slowdown in the Fed's interest rate hike
.
At present, macro sentiment has begun to cool, and the previous favorable factors have been digested, while China's manufacturing and property market data have both weakened, highlighting that the real estate industry is in trouble, although it is favorable to increase the number of policies, but it is difficult to cash in
the short term.
The weakness of real estate implicates the decline in the consumption cycle of home appliances and building materials, prompting the consumption port to become more and more weak, further dragging down the recovery of copper demand, and the upward resistance to copper prices has strengthened
.
In addition, the continuous spread of the epidemic has affected transportation, and there is still a backlog of goods in the upstream factory area and on the road, which makes the shortage of goods in various consumption places in stages, and the holders begin to have a strong price sentiment, but the willingness to replenish downstream is not high, and the market transaction performance is unsatisfactory
.
Therefore, weak demand has insufficient support for copper prices, while inventory support has weakened, and the upward driving force of Shanghai copper is not strong, continuing the weak trend
.