[minutes of SMM Morning meeting] Copper imports did not arrive as expected and continued to rise strongly under low inventory.

5.29 minutes of the Copper Morning meeting

Macro: 1) Saudi Arabia and other OPEC (OPEC) producers are considering extending record production cuts until the end of 2020, but have not yet won Russian support, according to OPEC+ and Russian industry sources. Several OPEC+ sources said Saudi Arabia, OPEC's de facto bellwether, was talking about maintaining production cuts rather than cutting them in July. Overnight US economic data: although more than 2 million people applied for unemployment benefits for the first time last week, the number of people applying for unemployment benefits fell for the first time since the outbreak of the new crown in the week of May 16. In response to misgivings about Sino-US relations and the Hong Kong issue, Li Keqiang pointed out that the Chinese Central Government has always stressed the need to comprehensively and accurately implement "one country, two systems", Hong Kong people ruling Hong Kong, and a high degree of autonomy. The decision on safeguarding national security just passed is to ensure the stability and long-term prosperity and stability of Hong Kong. [neutral] fundamentals: 1) Copper concentrate Teck Resources Limited announced on Wednesday that, Compania Minera Antamina's Antamina mine has now resumed operations. The former Teck resource has mobilized some staff to the mining area and will restore about 80 per cent of its production capacity, which is expected to gradually reach full capacity in the third quarter. 2) the price of scrap copper in Guangdong is 40500 yuan / ton ~ 40800 yuan / ton, which is the same as that of the previous trading day, and the price difference of fine waste is 831 yuan / ton, which is narrowed by 140yuan compared with the previous trading day. (ticket point is calculated as 5.9%) according to SMM, the recent improvement in the supply of scrap copper, the factory arrival situation is better, the increase of scrap copper raw material reserves will continue to increase the output of scrap copper rods, at the same time, the price difference between refined copper rods has returned to a relatively reasonable range, and the impact of scrap copper rods on refined copper rods has gradually increased, which is related to the recent weakening of refined copper consumption. 3) the warehouse receipt for imported copper on May 28 is quoted at US $92 per ton, and the bill of lading is quoted at US $78 per ton. The LME0-3 discount is US $32.75 per ton. The import loss is around 120 yuan / ton. The activity of the foreign trade market on the 28th is slightly better than that of yesterday, but the trading enthusiasm is still not high. Imports are still losing money, the market demand for far-month bills of lading is light, and the holders further lower their quotations. The buyer continues to be pessimistic about the price of the far-month bill of lading, is not willing to accept the goods, and wants to wait for the premium to fall further, so the transaction is deserted. The warehouse receipt offer is very few, and we have not heard of the transaction. 4) LME copper inventory decreased by 950t to 264425 t on May 28th, and copper warehouse receipt inventory in the previous period decreased by 846t to 56052 t. 5) spot East China: on May 28, the spot price of electrolytic copper in Shanghai rose 170 yuan / ton to 200 yuan / ton in the same month, down 5 yuan / ton compared with the previous trading day. On the spot side, the recent arrival of copper imports fell short of expectations, and the rising water remained strong under low inventories. It is expected that the spot water will rise to 170 RMB200 / ton today. South China: on May 28, the spot price of electrolytic copper in Guangdong Province rose 230,240 to the contract for the same month, down 5 yuan / ton compared with the previous trading day. In the spot market, copper prices fell in the night market, coupled with a decline in inventories, and on the 28th, holders continued to push forward prices for shipments. However, towards the end of the month, neither downstream users nor traders had a strong desire to receive goods; holders had no choice but to reduce prices. In addition, due to the insufficient supply of flat-water copper, there was an inflow of wet-process copper, resulting in a narrowing of the price difference between wet-process copper and flat-water copper yesterday. Overall, trading weakened yesterday as it approached the end of the month, coupled with higher rising water. Copper price and forecast: last night, Lun Copper closed at US $5372 / ton, up 1.44%, trading volume was 11000 lots, short positions were reduced by 354 lots to 271000 lots; Shanghai Copper 2007 contract closed at 43950 yuan / ton, up 0.76%, trading volume was 45000 lots, long positions increased by 240 lots to 103000 lots. The operating center of copper prices moved upward last night, with copper prices rising unilaterally on both sides of the market, mainly because the number of people applying for unemployment benefits in the United States continued to decline, and the dollar index hit a two-month low of 98.352 as risk sentiment improved. But as Trump said he would talk about China on Friday, geopolitical risks limit the rise in copper prices, and pressure is expected to continue until it hits the ground. It is estimated that today Lun Copper will be worth US $5300 per ton, while Shanghai Copper will be worth US $43,500 per ton.