[agency Review] Fed interest rate decision partial pigeon party is still good for copper, but spot turnover is still weak.

SMM Network News:

Spot: according to SMM, Shanghai electrolytic copper spot quoted 30-90 yuan per ton for that month's contract on July 29th, flat copper transaction price 51770 yuan / ton ~ 51820 yuan / ton, Shengshui copper transaction price 51820 yuan / ton ~ 51870 yuan / ton. Shanghai copper continued to withstand 52000 yuan / ton of pressure for many days under the shock, around 51700 yuan / ton to continue the consolidation state. The next month ticket quotation market share has been the majority, the spot continues yesterday's quotation, level copper quotation rises about 40 yuan / ton, good copper quotation rises 90 yuan / ton, the overall market transaction is weak, flat copper more than rising water 30 yuan 40 yuan / ton to have a deal, good copper price space is limited, transaction maintenance 80 million 90 yuan / ton, market reaction is cautious, wet copper transaction price is also stable at 60 ~ 40 yuan discount. Demand is weak near the end of the month, but the low supply of good copper makes the overall rising water not continue to go down, the target price for traders to receive goods is on the low side, and it is difficult to reach an agreement with the holders for the time being, and the quotation is basically in a state of stalemate in recent days.

Viewpoint: yesterday, Shanghai copper prices showed a strong pattern of shock, the discount price has not changed much from the previous day, and the market transaction is still relatively cautious. Buyers and sellers are still in the process of sawing. In the early hours of recent days, the Federal Reserve announced in its interest rate resolution that it would keep interest rates unchanged, but promised to use "all tools" to support the economy and keep interest rates near zero. Generally speaking, the attitude released by the Federal Reserve at this interest rate meeting is relatively dovish, which is still a relatively favorable condition for the non-ferrous metals sector led by copper.

In the middle line, from a macro point of view, there is still a high probability that low interest rates and ultra-loose monetary policy around the world will continue in the future, which is a very favorable factor for commodities. In terms of fundamentals, as Chile and other major producing countries are still seriously affected by the epidemic, the market is still worried about the supply situation in the second half of the year, but on the demand side, as the most important demand country, China is currently the most effective country in controlling the novel coronavirus epidemic. Therefore, it is expected that there is a higher probability of sustained recovery of domestic economic activity in the second half of the year. For example, State Grid has set the grid investment plan for 2020 at 408 billion yuan, but according to the data as of May, the actual investment quota of the grid is only about 1/4, so it is also possible to rush to work in the second half of the year. It should be noted that the current strong trend in copper prices may stimulate the acceleration or even higher-than-expected encashment of new capacity, which may also suppress copper prices from the supply side.

Strategy:

1. One side: look long with caution. Cross-city: hold over 3. Intertemporal: not available for the time being; 4. Option: not available for the time being

Concerns:

1. Whether the copper supply exceeds the expected release; 2. Whether the new epidemic situation continues to ferment; 3. Whether the downstream resumption of work and the pace of production continues to slow down; 4. Does the countercyclical policy continue to follow up in the later stage?

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