Today, copper in Shanghai continues to rise, mainly because of continued macroeconomic optimism. The National Bureau of Statistics announced today that China's CPI rose 2.5% in June from a year earlier, down 0.1% from a month earlier, down 3.0% from a year earlier, and up 0.4% from a month earlier. The decline in PPI narrowed, indicating that domestic and foreign demand continued to pick up, domestic infrastructure and manufacturing demand gradually recovered, and market expectations for copper demand remained optimistic, boosting market confidence and supporting copper prices. Fundamentals, according to SMM research, China's electrolytic copper production fell 1.42% to 759200 tons month-on-month in June, and domestic electrolytic copper production is expected to fall by 2.79% to 738000 tons in July 2020. Supply tensions remain, providing momentum for rising copper prices.
A brief comment on SMM
Today, Shanghai copper continued to rise, mainly due to continued macroeconomic optimism. The National Bureau of Statistics announced today that China's CPI rose 2.5% in June from a year earlier, down 0.1% from a month earlier, down 3.0% from a year earlier, and up 0.4% from a month earlier. The decline in PPI narrowed, indicating that domestic and foreign demand continued to pick up, domestic infrastructure and manufacturing demand gradually recovered, and market expectations for copper demand remained optimistic, boosting market confidence and supporting copper prices. Fundamentals, according to SMM research, China's electrolytic copper production fell 1.42% to 759200 tons month-on-month in June, and domestic electrolytic copper production is expected to fall by 2.79% to 738000 tons in July 2020. Supply tensions remain, providing momentum for rising copper prices. Today, the main force of Shanghai copper opened at 50210 yuan / ton in the morning, and the bulls increased their positions one after another after the opening, and the disk continued to rise to 50760 yuan / ton, then the center of gravity was briefly adjusted around 50790 yuan / ton, until it closed at 50620 yuan / ton at noon. At the beginning of afternoon trading, copper prices continued to rise, fluctuating higher at 50700 yuan / ton, climbing an intraday high of 50800 yuan / ton, taking profits at the end of the day, copper prices fell somewhat, and finally closed at 50690 yuan / ton, up 1040 yuan / ton, or 2.09%. The intraday 08 contract increased positions by 2766 to 120000, mainly by bulls; trading volume increased by 24000 to 144000; and Shanghai Copper 07 accelerated position reduction by 5910 to 19000, mainly by short positions.
At present, the disk still maintains the back structure, and the price difference narrowed to around 20 yuan / ton every other month. Shanghai Copper 09, 10 contracts have varying degrees of increased positions. Shanghai copper has been positive for 3 consecutive days, MACD red column continues to expand, and the lower high jump is far from the multiple moving averages, from a technical point of view, bullish copper prices. Wait for the outer disk guidelines at night to test whether the bulls can continue to push upward at the 51000 yuan / ton mark.
Spot market
Today, the spot price of electrolytic copper in Shanghai is 40 yuan / ton for the current month's contract, the transaction price of copper in Shanghai is 50440 yuan / ton ~ 50700 yuan / ton, and the transaction price of copper in Shengshui is 50450 yuan / ton ~ 50720 yuan / ton. A-share continued to rise, with frequent news of mine production expansion and shipping delays in South America, and the bullish atmosphere pushed copper prices higher step by step. Copper in Shanghai broke through the 50, 000 mark to 50700 yuan / ton, rising by more than 700 yuan / ton. At one point, the price gap in the morning market narrowed to flat every other month. The holder raised the quotation for good copper and offered 50 yuan per ton for copper, but the market was so afraid of heights that they all stopped to wait and see. The holder showed obvious willingness to cash at a high level. In the case of fruitless trading, good copper took the lead in opening the downward mode, rising water first dropped to about 40 yuan / ton, and leveling copper holders declined all the way in order to close the deal. If it is lowered to 20: 30, there will be a partial deal; Entering the second trading stage, the market can not help but slow down the traders who want to close the transaction quickly, lowering the flat copper adjustment to flat water, the transaction is difficult, and the wet copper is as low as 100 yuan / ton, no one is interested, and most of them have room to lower the price. Copper prices are rising strongly, and the lower reaches remain on the sidelines. Today, the monthly price difference has obviously narrowed, the holders are tangled, and delivery is approaching, and there is a contradiction between cash exchange and the willingness to support rising water, and it is difficult for traders to do anything. There is a lack of support and cooperation in spot transactions under high copper prices.
Today, the spot price of electrolytic copper in Guangdong province is quoted at 110 Mel 130 for that month's contract, with an average price increase of 55 yuan per ton, while wet copper is quoted at 50 to 60 yuan per ton, with an average price increase of 50 yuan per ton. The average price of electrolytic copper is 50495 yuan / ton, and the average price of wet copper is 50430 yuan / ton. Spot market: although inventories have risen slightly, the supply of goods that can be circulated in the market is very scarce, the vast majority of smelters do not have zero orders, and there are few traders with goods. Affected by this, there is no firm price in the market today, and it will not be actually quoted until after 10 o'clock, and the price is extremely high, but the market is really difficult to obtain, and the consignee can only be forced to accept the high supply of goods. By 11:00, the price of good copper was 130x140 yuan / ton, that of flat copper 110pound was 120 yuan / ton, and that of wet-process copper 50 pound was 60 yuan / ton. Overall, the shortage of negotiable goods in Guangdong is the main reason for rising water. We estimate that the situation will continue until before delivery, and it is expected that rising water will continue to show a volatile and higher situation.
Yangshan copper
Today's warehouse receipt is quoted at US $85 per ton, the average price is unchanged from the previous day, and the bill of lading is quoted at US $77 per ton, an increase of US $1 / ton over the previous day, QP August. The LME0-3 discount is $1.75 / ton, and the import loss is around 150 yuan / ton.
Thanks to the rapid appreciation of the renminbi in recent days, import losses have narrowed. In the case of a multi-day transaction stalemate, the buyer's cautious wait-and-see mood eased, while most of the holders maintained their previous quotations. At the end of July, the price of the second license bill of lading for arrival at Hong Kong was around US $90 / ton, and the mainstream fire method was about US $85 / tonne. the wet offer is $80 / ton. The price difference between buyers and sellers has narrowed, the market transaction has improved slightly, and the average transaction price has risen slightly. The warehouse unilaterally extended the cold market of a few days ago, with a limited number of offers and unheard of transactions.
At present, the transaction price of fire good copper warehouse receipt is around US $100 / ton, mainstream fire method is US $95 / ton, wet method is 85 yuan / ton, good copper bill of lading is US $88 / ton, mainstream fire bill of lading is US $83 / ton, and wet method is US $77 / ton.
Inventory
LME copper stocks today were 185200 tonnes, down 6825 tonnes, or 3.55 per cent, from the previous day.
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