Copper prices are difficult to rise because of a lack of drivers

Recently, domestic copper prices continue to oscillate in a range, and neither the bulls nor the bulls have taken a dominant position. The bulls are mainly based on the macro logic of economic recovery and water release leading to inflation, while the bears are based on the logic of increasing supply, such as output and imports, but not booming demand in peak season.At present, the macro surface and fundamentals failed to form resonance, copper upside resistance.In operation, it is recommended to bargain - hunting.

Dollar index under pressure

As the US presidential election draws to a close, Biden has already won 270 electoral votes. Although the power transfer after the US presidential election is still a long one, the result is basically clear. Even if the Trump team appeals and other measures, it is still difficult to reverse the situation of the election, and the risk of market uncertainty decreases.Mr Biden's policies tend to reduce the gap between rich and poor, so he will repair America's relations with its Allies, which makes policy less uncertain.Moreover, Mr Biden's preference for more fiscal stimulus, combined with more spending on infrastructure and new energy, would lead to a further rise in the deficit.

Against this backdrop, the dollar will remain weak in the medium term.But with election data showing republicans likely to take control of the Senate, which could limit the scope of Biden's fiscal stimulus, the dollar may be on a tear.

According to CNBC, data released by U.S. pharmaceutical giant Pfizer and German biotechnology company BioNTech on the third phase of a vaccine trial showed that their vaccine could prevent 90 percent of novel Coronavirus infections without a prior infection, ahead of market expectations for vaccine development.However, it still takes some time for the vaccine to be developed and produced in the later stage. At present, the epidemic situation in Europe and The United States is still severe, and France, Germany, Britain and other countries once again declared the closure of the country, so the recovery in the future is under pressure.But in terms of non-farm and employment data, recovery remains the dominant trend in the US and Europe.China's economic data also performed well, and the global macro economy continues to improve.

Increased supply pressure

Copper concentrate market still maintain tight pattern.The SMM copper concentrate index is now trading at $48.4 a tonne, down 30 per cent since the start of March.China Copper Raw Materials Joint Negotiating Group (CSPT) set the base price (TC/RCs) of copper concentrate processing in the fourth quarter of this year at 58/5.8, which is higher than the third quarter.Two of China's largest smelters have concluded copper concentrate supply agreements with Chilean miners and Antofagasta for the first half of 2021 at a contract processing fee of US $60.8 per tonne.It can be seen that the concentrate in the fourth quarter is still relatively tight, and copper production will resume in 2021.

Although the processing fee is very low, but the smelting output is still increasing.From June to September, the import volume of refined copper was amazing. The average monthly import volume of refined copper was more than 500,000 tons. According to the import volume of unforged and rolled copper and copper materials in October, the import volume of refined copper in October was also about 400,000 tons.Refined copper is becoming increasingly abundant in large quantities of imports.

Consumption shows differentiation

Recent economic data suggest a strong manufacturing recovery in the U.S. and Europe.Data showed the ISM purchasing managers' index for U.S. manufacturing rose to 59.3 in October, its highest level since August 2018.The euro zone's final manufacturing PMI for October came in at 54.8, beating market expectations of 54.4 and well above June's final reading of 47.4.But the recent resurgence of the epidemic in Europe, with Spain, France and the UK all declaring renewed states of emergency, is likely to have a major impact on the European economy.At the same time, due to the extremely large outbreak in the United States, the economic situation in Europe and the United States in the next two months is highly uncertain, or will restrain the demand.

On the domestic side, the end consumption shows differentiation, and the cable demand performance is poor, while the automobile, home appliances and other fields are driving the growth.The next two months will focus on the power data, as the actual data fall far short of the grid target at the beginning of the year.

To sum up, supply pressures have increased, demand has weakened seasonally due to the epidemic, and follow-up attention has fallen short of expectations for power investment.In general, the lack of driving factors, copper prices are difficult to trend market.