SMM8, July 5: Shanghai copper closed at 50090 yuan / ton on Friday, and closed at 49230 yuan / ton on Friday, Aug. 3. Copper prices fell 1.71% on Friday from Friday, with 7% predicting bearish prices this week in a survey last week.
On the macro side, at home, the offshore RMB fell below 6.90, the lowest since May 31 last year, and the accelerated depreciation of the RMB has slightly resisted the decline in Shanghai copper. Internationally, the US government has threatened to impose tariffs, the trade war may escalate again, and non-ferrous metals are under collective pressure. Chilean copper negotiations, short-term overshadowed by Sino-US trade tensions, but will still be the catalyst for the market.
According to the SMM survey of domestic industry figures, for the day closing price of 49230 yuan / ton on Aug. 3, the general trend is more optimistic about the trend next week, that copper prices rose more next week. Fifty-six percent of participants thought copper prices were bullish in the short term (up more than 1 percent), 22 percent thought copper prices were volatile (up less than 1 percent), and 11 percent thought copper prices were less volatile (down less than 1 percent). Eleven per cent of participants thought copper prices would be bearish next week (down more than 1 per cent).
SMM column: outlook for next week
Shanghai copper short-term volatility is strong, because of China's fiscal and monetary policy marginal easing, the central bank continues to inject liquidity into the market, relative to the country's previously strong black system has a price repair. At the same time, the pml of the major economic institutions has not changed much compared with the previous value, and the economic growth concerns brought about by the trade war have been alleviated for the time being. However, copper prices still lack driving force, the growth rate of domestic infrastructure investment continues to slow down, road transport investment increased by 10.9% in the first half of the year, the growth rate fell 3.9 percentage points; Investment in the railway transport industry fell by 10.3 per cent, with demand slowing in the short term, superimposed by seasonal factors. Although the current policy margin is loose, but reflected in demand is sometimes lagging.
At present, although liquidity is relaxing, but the downstream demand expansion of enterprises is not obvious, because enterprises generally have high liabilities, banks are subject to assessment constraints, residents' consumption capacity is lack of growth point. Although the initial value of manufacturing PMI in Europe and the United States in July was better than expected, the overall decline was probably because companies were scrambling with Trump's tariff policy. On the fundamentals, the short-term supply contradiction of copper is not prominent, although Escondida8 may strike in mid-month. Copper prices are expected to remain volatile next week, with the focus likely to rise.
The Asian dollar index continued to rebound and is trading around 94.8, as the Federal Reserve's latest interest rate resolution maintains expectations of four interest rate increases during the year, and the Bank of England has decided to raise interest rates as high as 90 percent, or limit the rise in the dollar index. In addition, there are escalating concerns about the short-term Sino-US trade dispute, and we need to pay attention to the progress of the incident. Copper industry information, it is reported that BHP Billiton's Chilean Escondida copper mine vote showed that rejected the management proposal and decided to strike, the copper mine is the world's largest copper mine. BHP Billiton is expected to ask the government to mediate a settlement, which will delay the strike action by up to 10 days.
The short-term copper price will seek the trading direction in the continuous hype of the Chilean copper mine strike and the Sino-US trade war, and the long-short trading tends to be repeated. it is suggested that the Shanghai copper 1809 contract can be sold high and low between 500,000 and 49,000 yuan / ton, and the stop loss is 450 yuan / ton each.
SMM exclusive Forecast:
Europe and the US next week focused on the US CPI and PPI in July compared with the previous month, as well as the number of first-time claims for unemployment benefits that week, the overall data are expected to be higher than the previous value, the dollar is likely to remain high volatility, pressure on copper prices. There has been no news of the outcome of negotiations between China and the US on raising the tax rate to 25 per cent, but further developments are expected next week, and if the US insists on raising the tax rate and the Chinese fight back, the market could fall into yet another panic. Next week's copper strike is expected to enter government mediation, if mediation fails, it will enter the strike stage. When the two events ferment at the same time, the impact of the strike will be reduced by the continuous deterioration of the macro environment. It is expected that copper prices will remain mainly short in the short term, and according to the CFTC copper position report, short forces still have the upper hand. from the Brin track, the weekly line is entangled in the next track, and the overall situation is not optimistic. it will run at US $6050 per ton ~ US $6220 per ton next week.
On the domestic side, next week focus on domestic foreign exchange reserves in July, imports and exports from the same period last year, CPI and PPI from the same period last year, and social financing. With the deterioration of the macro environment and the upward difficulties in the domestic economy, it is expected that the depreciation of the offshore renminbi will not slow down next week, but it will also provide some support for the trend of domestic copper prices. Under the condition of macro bias, bulls still dare not act rashly, the upward power is insufficient, the rebound is still weak, but relying on the resistance, Shanghai copper is expected to run in the range of 48500 yuan / ton ~ 50000 yuan / ton next week.
On the spot side, due to this week's typhoon and the update of the customs internal customs declaration system, the pace of import copper declaration into the market has been delayed during the week. at the beginning of next week, the tight supply situation will be difficult to change for the time being, and the spot will still maintain the trend of low volume and high price. Cargo holders are still mainly lifting water. Today, the monthly spread narrowed from 120 yuan / ton to 80 × 90 yuan / ton, preventing the water from rising again today. Next week, whether the monthly price difference can be above 100 yuan / ton is one of the bases for whether the rising water can be raised to 100 yuan / ton. If the disk pressure falls, downstream buying at low prices will also gradually increase, traders with the ability to fund will continue to enter the market to receive goods, market activity is expected to maintain a good situation. It is expected that the sticker will rise by 40 ~ 120 yuan per ton next week. Pay attention to the changes in the supply pattern caused by the arrival of imported copper into the warehouse. Overall, despite the slow consumption season in August, low inventories and the accelerated depreciation of the renminbi have kept the market voice in the hands of sellers in the near future.