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[copper market today] PMI continued to pick up in July and the spot market activity in Shanghai Copper Shengyang may improve after the low activity across the month.
Jul 31,2020 16:53CST
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Source:SMM
The content below was translated by Tencent automatically for reference.

Introduction to this article: copper closed in Shanghai today, mainly because the National Bureau of Statistics announced that China's manufacturing PMI was 51.1% in July, above the 50 rise and fall line for five consecutive months. The manufacturing PMI index continued to pick up, indicating that the domestic economy continues to recover. However, last night, the United States announced that GDP shrank sharply by 32.9% in the second quarter, the biggest decline since the 1940s. Uncertainty about the outlook for economic recovery, coupled with the continued spread of the global epidemic, added to investors' pessimistic expectations, and macro sentiment put pressure on copper prices as expected.

A brief comment on SMM

Copper closed in Shanghai today, mainly because the National Bureau of Statistics announced that China's manufacturing PMI was 51.1% in July, above the 50 rise and fall line for five consecutive months. The manufacturing PMI index continued to pick up, indicating that the domestic economy continues to recover. However, last night, the United States announced that GDP shrank sharply by 32.9% in the second quarter, the biggest decline since the 1940s. Uncertainty about the outlook for economic recovery, coupled with the continued spread of the global epidemic, added to investors' pessimistic expectations, and macro sentiment put pressure on copper prices as expected. Today, the main force of Shanghai copper opened at 51750 yuan / ton in the morning. After the opening, Kongping mostly went up the copper price slightly, exploring the intraday high of 51950 yuan / ton, but the rising momentum was limited, and the disk fell to 51700 yuan / ton, and arranged sideways around this position until the midday close. In afternoon trading, copper prices briefly rose to 51870 yuan / ton and then fell again, crossing the daily moving average line to explore an intraday low of 51620 yuan / ton. The short part left the market at the end of the day, making the disk temporarily out of the low level, and finally closed at 51820 yuan / ton, down 10 yuan / ton, or 0.02%. Today, the main daily position of Shanghai Copper decreased by 3768 to 119000, mainly by short positions, while the trading volume increased by 25000 to 177000. 08 during the contract day, positions were reduced by 6927 to 47000, mainly by short positions, while trading volume decreased by 3000 to 26000.

Today, the closing of copper in Shanghai, the opening of KDJ has reined in, waiting for the outer disk guidelines in the evening to test whether the bulls can push again to support copper prices to continue to rise.

Spot market

Today, the spot price of electrolytic copper in Shanghai is quoted at 10-90 yuan per ton for that month's contract, the transaction price of Pingshui copper is 51760 yuan / ton ~ 51920 yuan / ton, and the transaction price of copper is 51820 yuan / ton ~ 51980 yuan / ton. Shanghai copper continued to fluctuate around 51800 yuan / ton first line. Morning market quotation flat water copper in the rising water 20 yuan 30 yuan / ton, good copper price price in the rising water 90 yuan / ton, market transactions more wait-and-see, the end of the month stalemate characteristics are obvious, low activity, demand decline, in the trading price, flat copper trading in the rising water 10 yuan 20 yuan / ton, good copper can be as low as 70 yuan / ton, wet copper down, as low as 80 yuan / ton discount. At the end of the month, enterprises are involved in settlement and invoicing, and there is a lack of buying interest among traders and downstream, and the transaction may improve after the next month.

Today, the spot price of electrolytic copper in Guangdong province quoted a discount of 70-flat for the current month's contract, with an average price increase of 30 yuan / ton; wet copper quoted a discount of 110-100, with an average price increase of 40 yuan / ton. The average price of electrolytic copper is 51805 yuan / ton up 25 yuan / ton, and the average price of wet process copper is 51735 yuan / ton up 35 yuan / ton. Spot market: although Guangdong inventory continues to soar today, Guangdong inventory as of Friday was 42400 tons more than last Friday, but the holder changed yesterday's behavior of selling goods to cherish sales waiting to rise, in early trading can still hear-80/70pc transactions, but to the second quarter when few traders shipped, even if there are shipments is also sky-high. The reasons for such a big contrast between yesterday and today are as follows:

1. When the discount is large, the holder is more willing to receive the goods.

two。 The expansion of the basis has the opportunity of arbitrage;

3. Next week downstream gradually resume production holders expect consumption to improve, bullish rising water.

Overall, today's market trading is significantly better than yesterday, rising water follows the rising tide. However, we believe that the height of the rebound in rising water next week may be limited, demand will not have a strong recovery, and high inventories restrict the height of the rebound.

Yangshan copper

Today's warehouse receipt quotation is US $77-90 per ton, the average price is US $3 / ton lower than the previous day, and the bill of lading is quoted at US $66-80 per ton, with an average price reduction of US $2 / ton compared with the previous day, QP August. The LME0-3 litre of water is US $11.25 / ton, and the import loss is around 350 yuan / ton.

Today, the activity of the foreign trade market is still not high, and the overall performance of the transaction is light. Due to the direct impact of the closing of price comparison, the demand of buyers has hardly improved, and some traders have quoted low prices for the supply of goods that are about to arrive in Hong Kong, but "there is no market". At present, the LME back structure is 11.25 US dollars / ton, and the price difference between August and September QP is 7 US dollars. The pressure on the holder to change the month increases, so the warehouse receipt price continues to be reduced, but no one is interested. Yangshan copper premium continues to be under pressure in the deserted market.

At present, the transaction price of good copper warehouse receipt is around 90 US dollars / ton, 85 US dollars / ton for mainstream fire method, 77 yuan / ton for wet method, 80 US dollars / ton for good copper bill of lading, 73 US dollars / ton for mainstream fire method and 66 US dollars / ton for wet method.

Inventory

Today, LME copper stocks are 128125 tons, down 1100 tons, or 0.85%, from the previous day.

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