5.6 Summary of Bronze Morning meeting

[5. 6 SMM Bronze Morning meeting minutes] Macro aspect: 1) the number of initial claims for unemployment benefits in the United States during the week of April 25 was 3.839 million, expected to be 3.5 million, compared with the previous value of 4.427 million. The core PCE price index fell 0.1% in March from a month earlier, and is expected to fall 0.1%, up from 0.2%. [bearish] 2) the monthly rate of factory orders in the United States in March was-10.3%, the largest decline since the data was compiled in 1992, and is likely to decrease further, as disruptions in the supply chain caused by the New Crown virus epidemic have disrupted supply chains and curbed exports. The ECB left the main refinancing rate unchanged at 0 per cent, the deposit mechanism interest rate at-0.5 per cent and the marginal lending rate at 0.25 per cent. This year, it will continue to buy 20 billion euros of assets per month, and confirm that the (PEPP) size of the 750 billion euro emergency bond purchase program will continue until the end of 2020. Fundamentals: 1) as of Thursday, the SMM copper concentrate index (weekly) was $55.25 / tonne, down $2.17 / tonne from the previous week. Glencore (Glencore) on Thursday cut its capital expenditure and production targets for 2020 to reflect the impact of the new crown pneumonia outbreak on its operations, adding that it was able to respond well to the outbreak as a result of spending cuts. Glencore said copper production fell 9 per cent in the first quarter from a year earlier to 293000 tonnes as it closed the Mutanda mine in the Congo. [Lido] 2) after the scrap copper price rose, the scrap copper price fell into the adjustment stage, and the scrap copper price was close to 40,000, reaching the psychological price of the holder. Before May Day, the stock was cleared one after another, and the domestic scrap copper trade basically returned to normal. The recovery of overseas scrap copper supply system is positive, but the recovery process is expected to be slow. Recently, copper scrap circulation active, procurement is relatively easy, but manufacturers are still actively replenishing inventory, scrap copper as a whole is still in short supply. Last Thursday, the price difference between fine waste and waste was 368 yuan / ton, calculated as 6.1%. Imports of copper were basically balanced last Thursday. On the last day before the festival, the foreign trade market performed deserted, and there were few market quotations and inquiries. Traders rarely offer, and say they have optimistic expectations for demand in the post-festival market, so they choose to hold the goods on the sidelines. The buyer's demand remains light and wants to wait and see what happens in the future. According to SMM research, the increase in the amount of copper imported in the week after May Day is limited, and the Yangshan copper premium will remain high in the short term. 4) inventories last week LME copper stocks fell 8900 tons to 253700 tons; the previous period of copper stocks fell 4432928081 tons to 230956 tons; bonded area copper stocks fell 26300 tons to 279500 tons. [Lido] 5) spot East China: spot, after the festival, traders are more abundant funds, increased willingness to receive goods, downstream in the production and consumption of raw material inventory also appeared replenishment demand, it is expected that the rising water will rise compared with before the festival. It is estimated that the spot water in Shanghai is expected to rise by 140-170 yuan per ton today. South China: Guangdong electrolytic copper spot contract rose 200-210 on Thursday. Spot market, the last trading day before the festival, most of the downstream has completed stock, not many continue to replenish. And most traders have entered a semi-holiday state, there are not many transactions. As a result, rising water continues to fall. Concerned about the arrival and resumption of production after the festival, we expect the arrival of goods or limited, but consumption is OK, it is estimated that the rising water after the festival will not fall sharply. Copper prices and forecasts: copper closed up 0.92 per cent at $5176 a tonne last night. Last night, copper prices first suppressed and then rose, the European session recovered the day's gains, and explored the day's low to $5117 / ton, but then led by the sharp rise in crude oil, copper prices strengthened. Us crude oil contracts rose nearly 20 per cent to more than $24 a barrel last night, rising nearly 20 per cent to more than $24 a barrel, propping up copper prices amid sharp contraction in the macro eurozone and US PMI and a possible increase in the resumption of trade disputes between China and the US. However, it is necessary to guard against the fact that the reduction in overseas copper demand is becoming more and more obvious with the development of the epidemic situation. On the other hand, the speed and extent of production reduction in oil-producing countries can hardly offset the loss of about 30 million barrels per day as a result of epidemic prevention and blockade, superposing concerns about crude oil storage capacity. the boost from oil prices to copper prices may not be sustainable. At present, Lun copper closing Yang, below to test the 5th and 10th moving average support, it is expected that short-term copper prices will enter the concussion grinding bottom market. Today's copper is expected to be 5120-5170 US dollars / ton, Shanghai copper 41700-42200 yuan / ton.