Copper Prices Move Rangebound with Some Ups amid the Expected Bullish Macro Factors at Home and Abroad

Published: Jan 16, 2023 16:18 (GMT+8)

Source: SMM

Save

The market once expected the US Fed to slow down rate hikes as US non-manufacturing PMI did not reach the expected high.

SHANGHAI, Jan 16 (SMM) - The market once expected the US Fed to slow down rate hikes as US non-manufacturing PMI did not reach the expected high. Last Thursday, the US December CPI growth rate fell to 6.5%, which further confirmed the market’s expectations for the Fed’s possibly slower rate hikes on February 1. According to the CME FedWatch Tool, the probability that the Fed will raise interest rates by 25 basis points at the February meeting is 79.2%. The US dollar fell sharply to around 101 last week, while copper prices rose. According to statistics, the total monthly financing of Chinese real estate companies in December 2022 exceeded 100 billion yuan, a month-on-month increase of more than 80%. And many provinces and cities in China successively introduced real estate-related support policies. The tone of Chinese policies is set optimistic, making the market more confident in the mid and long-term economic development.

On the fundamental, most small and medium-sized enterprises took the CNY holiday last week, and a small number of large enterprises will begin the holiday early this week. Companies that maintain the operation this week will generally cut the production amid poor terminal demand and high in-plant inventories of finished products. According to SMM’s latest data, as of last Friday, copper inventory across major Chinese markets totalled 135,500 mt, up 86,600 mt YoY. The bonded zone inventories will grow in the near future amid closed import window. But the smelters can export instead, hence the possibilities of the inventory accumulating after the Chinese New Year will decrease. LME copper prices rose last week and once hit a seven-month high, while SHFE copper prices grew much slower. The most-traded SHFE copper is expected to move between 66,000-69,500 yuan/mt this week, and LME copper will trade between $8,550-9,200/mt.

Spot premiums will fluctuate with some ups early this week affected by the spread between the front-month and next-month contracts. Afterwards, the premiums will drop with lessmarket participants remaining in operation approaching the Chinese New Year. SMM presumes that the spot premiums may move between 0-100 yuan/mt this week.

Spot Futures Market Market

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

3 hours ago

Fatal Accident Reported at Codelco’s Radomiro Tomic Mine

Chile’s mining regulator reported on October 1 that a worker had died in an accident at Codelco’s Radomiro Tomic copper mine in northern Chile. Preliminary information indicates that the incident occurred in an area associated with a conveyor belt near Calama. Chile’s National Geology and Mining Service has sent personnel to inspect the site and take appropriate administrative measures. The worker’s identity, employer and the cause of the accident have not been disclosed, while an investigation remains under way. No other related emergencies were reported. Codelco and the authorities have not announced any operational suspension or production impact.

3 hours ago

4 hours ago

Escondida Supervisors Reject BHP Contract Offer, Paving Way for Potential Strike

Supervisors at BHP's Escondida copper mine in Chile have rejected the company's final collective bargaining offer, increasing the risk of a potential strike at the world's largest copper mine. According to foreign media reports, 95% of participating members of the 1,020-member supervisors' union voted in favour of strike action after rejecting BHP's latest contract proposal. Under Chilean labour law, the union and the company must now enter a mandatory five-day government-led mediation process before any legal work stoppage can begin. The mediation period can be extended by another five days if both parties agree. The union said BHP's offer did not represent a material improvement over the existing contract and criticised proposed requirements for supervisors to train in plant operating activities, including truck driving. BHP has said it plans to seek mediation through Chile's Labour Inspection Office in an effort to reach an agreement. The latest labour development comes shortly after a fatal maintenance-related accident at Escondida, which temporarily disrupted operations. The supervisors' union had previously rejected BHP's request to extend negotiations following the incident. Operations at Escondida have since been gradually resuming. The 95% vote in favour of strike action represents a significant escalation in collective bargaining negotiations at Escondida, although there has been no strike or reported production impact from the labour dispute at this stage. The mandatory mediation process provides an opportunity for BHP and the union to reach an agreement before industrial action begins. Given Escondida's position as the world's largest copper mine, any prolonged work stoppage could increase near-term copper supply uncertainty, making the outcome of the mediation period an important market focus.

4 hours ago

Marimaca Secures Grid Connection Authorization for Marimaca Oxide Deposit

Marimaca Copper has received grid connection authorization for its Marimaca Oxide Deposit (MOD) in Chile and has agreed key commercial terms for a power-purchase-agreement framework, advancing the project's power infrastructure planning as development progresses. The grid connection authorization provides a pathway for MOD to connect to Chile's electricity system, while the agreed commercial terms establish the basis for a future power supply arrangement. Marimaca said the framework is intended to support the project's access to 100% renewable electricity. The company described the development as an important de-risking milestone for MOD, as reliable long-term power supply is a key requirement for the planned mining and processing operation. Marimaca is advancing MOD as an oxide copper development project in northern Chile. The company has been progressing permitting, engineering and other project-development work as it moves the asset toward a potential construction decision. The power milestone strengthens the project's infrastructure readiness, but a final power-purchase agreement and full project execution remain subject to further development steps and contractual completion. Securing grid connection authorization reduces an important infrastructure risk for the Marimaca Oxide Deposit by providing greater clarity on how the project could access long-term electricity supply. The proposed use of renewable power could also support lower-emissions copper production. Attention will now turn to finalization of the power-purchase agreement and progress on the remaining permitting, financing and development milestones required before construction.

4 hours ago