Are copper prices going up

At present, the copper metal market into the off-season, other copper consumption area demand also weakened.Under this influence, domestic copper social inventory gradually accumulated.On the macro side, the economic situation in Europe and the United States has recovered well, and most of the monetary policy has been tightened. The interest rate of the dollar and the United States debt has rebounded sharply, causing a big impact on the financial properties of copper.The recent Chilean copper strike frequent, short-term copper price or high repeatedly, but in the monetary tightening superimposed seasonal off-season resonance, copper price high cold, mid-late August or turn down.

High purity coppers are affected by Liquidity is likely to tighten

On the basis of the global flood, the World Bank expects the global economy to grow by 5.6% in 2021, and the US economy is expected to grow by 6.8%. The inflation caused by the huge liquidity of funds has emerged.Us non-farm payrolls beat expectations and European manufacturing sentiment is at an all-time high.As the economic situation in Europe and the United States continues to improve, the Fed frequently beats market expectations to send a tightening signal to the market. The Fed governor said he will announce the taper plan in September. He expects the taper to take about eight months, and future policy tightening is inevitable.European monetary policy is likely to diverge from the Federal Reserve, with European Central Bank officials holding firm on the dovish stance that the ECB's bond-buying program will continue until at least the end of March.To sum up, the European and American economies are generally improving, but the monetary policy stance is differentiated, the European Central Bank dove stance has not changed, and the Federal Reserve is ready to taper the bond purchase, the large probability of liquidity margin tightening in the second half of the year, which has a pressure on the nonferrous plate, the market will reflect the bearish expectations of nonferrous market in advance.

Copper prices are affected by Social inventory accumulation

Based on the current high copper prices, the downstream wait-and-see sentiment is strong, recent cable business orders are weak, finished goods inventory slightly increased;Fine copper rod overall stable, enameled wire overall continuation of the off-season market.Jinchuan overhaul after a large inflow of east China market, the previous guixi price phenomenon was contained, traders led to lower discount.

Domestic copper stocks stood at 171,000 tons on Friday, up 20,000 tons from the previous week, while China's bonded copper stocks stood at 392,000 tons, down 17,500 tons from the previous week.Bonded stocks fell for four straight weeks and imports increased.Overall, the off-season accumulation of moderate, but domestic inventory growth led to a significant pressure on the premium.

At present, the smelters are still in the overhaul stage, and all the major smelters in Guangxi have received the notice of power limit, and some of them will advance the overhaul to The peak production in August. It is estimated that the total output of electrolytic copper in August will be affected by the overhaul and power limit of smelters, exceeding 40,000 tons.In late August and September to resume work is expected to have a negative impact on copper prices.

Copper prices are affected by Seasonal pressure

The Shanghai copper index has a higher probability of rising in February, April, June, July, August, October, November and December, and a higher probability of falling in January, March, May and September.The biggest monthly gains occurred in December and the biggest declines occurred in May.At present, the Shanghai copper Index is at a historical high in the same period, with a greater probability of falling. Considering the seasonal trend, the probability of falling is greater from mid-to-late August to September.

From the historical cycle, the trend of Shanghai copper in the first half of 2021 is close to that of Shanghai copper in the first half of 2011.China's macroeconomic, fiscal and monetary policies are close to the situation in 2011.In terms of monetary policy, China took measures such as raising the margin ratio and raising interest rates to tighten monetary policy in 2010. In 2021, although prudent monetary policy was adopted, M2 growth rate returned to a historical low.Therefore, in the second half of 2021, the copper price trend is likely to be similar to the trend in the second half of 2011.

In summary, as the global economy continues to recover, liquidity will gradually tighten, which will cause downward pressure on the whole commodity sector.In the short term, affected by the epidemic and the off-season of the third quarter, the supply and demand of the copper market is gradually easing, and the enterprises that have stopped production due to power restriction are expected to resume work in the future, and the overall fundamental trend is negative.

Therefore, the author expects that the Shanghai copper index will form a strong pressure level at the gap of 73,000 yuan/ton. After short-term repeated oscillation, it will start a downward trend in mid-late August, and the target level is 61,000 yuan/ton.In operation, can consider based on 73,000 yuan/ton pressure level around the empty single hold.