SMM, Oct. 24, news:
Friends of the copper circle should pay attention to the fact that the back structure, which has been maintained for a long time in the Shanghai Copper contract in recent months, has changed to the contango structure. From the point of view of the disk, the 1811 and 1812 contracts are floating green, the far monthly contracts are collectively turned red, and the signs of the near strong and far weak pattern are dissipated.
In the process of hovering at the bottom of the previous round, global dominant inventories fell rapidly, falling 18.2% in mid-September compared with the same period last year, electrolytic copper rose, spot support highlighted, leading to a stronger contract in recent months. However, as the futures market rises to above 50,000, the replacement of scrap copper by refined copper weakens, and the downstream also begins to stop and wait and see, the spot is transferred to the discount, and the dominant inventory rises, neither the spot delivery arbitrage nor the interplate arbitrage between buying and selling is realistic. Back logic has loosened, arbitrage thinking began to change. As a result, in recent months, long funds began to take the initiative to close positions, part of the move to the far month layout, further promoting the contango pattern. At the opening of trading this morning, the Shanghai Copper 1812 to 1901 contract showed an obvious back structure, with a maximum base difference of about 150,150 yuan. Following the above logic, the fund quickly sensed the obvious arbitrage space, and the operation of buying 1901 and throwing 1812 made the price difference return quickly.
Inventory began to hit bottom and rise
As of Oct. 19, copper stocks in the previous period were 140800 tons, up nearly 30, 000 tons in the past three weeks. Among them, South China is more typical, with inventories breaking through the 40, 000 mark today, an increase of about 31000 tons from 11000 tons in mid-September. We believe that the higher price limits the replenishment of downstream reservoirs to a certain extent, and there is a large outflow of scrap copper from South China. In this round of trade disputes and deleveraging, Guangdong private enterprises are more damaged, the supply side also has a new source of goods to the warehouse in the near future, resulting in Guangdong discount with the inventory increased significantly, spot trading is relatively light.
The discount shows an expanded rhythm.
Today, Shanghai Pingshui copper discount 50 to 40 yuan / ton, the spot market is still weak, downstream bearish copper prices, still remain on the sidelines, did not see the initiative to buy, the overall transaction has not improved, paste water may be magnified, tomorrow long order trading is basically over, The proportion of the circulation of bills in the market may increase significantly next month, and the discount will also be difficult to restrain the pace of expansion, and areas such as North China, South China, and Shandong that reflect direct consumption downstream are even more dismal.
Copper prices have been horizontal for a month, up and down there are difficult to break through the pressure level, a number of averages adhere to each other, unknown direction, funds have left the market one after another, the position has been as low as 510000 hands. Therefore, although the current contango is not yet firm and the price difference between contracts is slightly smaller, whether the signs of turning will guide the future direction? after all, I vaguely remember 17 years of Dahua deep ploughing for a long month, and the futures market skyrocketed in the case of contango, but in other words, Is the pure copper spot weakness worry to fall back in recent months, the early rebound logic has been loosened, to a certain extent bearish prices, worth thinking about. (SMM grandson Yang Yan Jun)