Minutes of SMM Bronze Morning meeting on July 18

[7.18 SMM minutes] Macro: 1) the Federal Reserve Brown Book survey shows that US economic growth has moderated, job growth has slowed, and inflation has remained stable or slightly weaker. (2) EIA crude stocks fell 3.116 million barrels last week, oil prices continued their decline of nearly 2 per cent last week, and last week US gasoline and diesel consumption was much lower than expected, making investors anxious about demand. Fundamentals: 1) scrap copper: yesterday refined scrap price difference of 1679 yuan / ton. The price difference of refined scrap remains high, and the spread of refined copper rod also expands slightly, but at present, the output of various enterprises is maintained at a low level, the demand is relatively small, and some copper scrap rod enterprises are still shutting down production, resulting in a sharp decline in the starting rate in June compared with the previous month, and the overall industry of scrap copper rod has not shown a significant improvement; the shipowners still maintain a small amount of shipment status. The market is now looking forward to a pick-up in terminal consumption to drive demand. 2) Import copper: yesterday LME0-3 discount 12 US dollars / ton, import loss of about 200 yuan / ton. Import prices have fallen slightly in the past two days, leading to a deterioration in demand for warehouse receipts. On the contrary, in late August, the bill of lading price appears to be more firm, good copper has a transaction price of more than 70, wet mainstream transaction price is also stable 55, fire trading price is concentrated in the vicinity of 63. The price of bill of lading has risen obviously, the price of warehouse bill of lading has been basically flat, there are still more customs declaration imports. 3) stocks: LME copper stocks increased by 6675 tons to 299600 tons on July 17, and copper warehouse receipts in the previous period increased by 1154 tons to 65371 tons. 4) spot: spot prices rose slightly today, which will add to the fear of high sentiment in the market, which is expected to decline, but the holding mood will be maintained. It is expected that the spot water will rise by 30 yuan to 90 yuan per ton today. Copper prices and forecasts: last night as a whole showed a low opening high trend, Shanghai copper main contract short take the initiative to reduce positions, copper prices once again rushed up to explore the 47000 gate position, but failed to break through smoothly. Copper prices rose in the evening, mainly because of poor US real estate data and a slight fall in the dollar. Although weaker-than-expected US economic data spurred the market to strengthen expectations of a rate cut last night, the economic brown book released yesterday also showed that the US economy continued to maintain moderate growth, so there was still greater uncertainty about the rate cut. The market still has a preference for safe haven assets, superimposed the current weakness in crude oil demand, and the overall downward pattern of copper prices has emerged. At present, the center of gravity of Shanghai copper moves to the middle rail of Brin, alert to the high level of KDJ index to form a bad dead fork. It is expected that London copper will be US $5950 / ton today and Shanghai copper will be 46400 / ton.

(SMM Kwong Tze-si)