SMM: Fundamentals&Macro Hard to Support Copper Price in November

Published: Nov 16, 2017 17:25 (GMT+8)
Recently China’s economic data is lower than anticipation, which causes concern. Copper price slumps under pressure.

SHANGHAI, Nov.16 (SMM)-Recently China’s economic data is lower than anticipation, which causes concern. Copper price slumps under pressure.

Copper output is in upward channel both home and abroad

In the beginning of the year global copper output was reduced due to strikes and suspension but from April copper output in Chile has been in an obvious upward channel.

Domestically, China’s refined copper output was 722,500 tonnes in October 2017, up 5.55% MoM and 9.14% YoY, according to SMM data. Output in the first ten months of the year totaled 6.5465 million tonnes, up 1.84% YoY. SMM predicts China’s refined copper output in November will keep as high as 723,000 tonnes, rising 8.4% YoY. Output in the first eleven months of the year is estimated to reach 7.2695 million tonnes, up 2.46% YoY, which shows sustainable rise of domestic refined copper supply.

Downstream demand is expected to weaken

As per SMM research, copper downstream consumption has weakened since fourth quarter for seasonal reasons. The average operating rate of cooper plants in October is 72.7%, down 2.66% on monthly basis. In November the percentage is expected to drop to 71.83%.

Copper inventory continues to increase in SHFE

Copper inventory in LME dropped to 260,150 tons in Nov 10, but in SHFE the copper in stock has increased since September. Copper inventory in COMEX has risen rapidly to 207,241 tons.

According to SMM, copper inventory in LME, SHFE, COMEX and bonded warehouses is 28,000 tons more than it was in September, and it proves the sufficient supply in the market.

Besides, SMM predicts imported copper inflow will increase in November.

Comprehensively speaking, SMM thinks copper price is estimated to keep weak with sufficient supply, slower demand, dropping economic data in November.


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Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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