Social Inventory Continues to Decline, SHFE Copper Fluctuates Rangebound [[April 28] SHFE Market Closing Commentary]

SHFE copper opened slightly lower in the morning session and then declined, before the market rebounded, closing down 0.08%. Market concerns about subsequent economic growth have increased, and uncertainties surrounding trade frictions persist. Although domestic social inventory of copper cathode continued to decline, copper prices faced significant upward pressure, continuing to fluctuate rangebound.

China's industrial enterprise profits in Q1 shifted from decline to growth, but the IMF lowered its global economic growth forecast, and uncertainties surrounding global trade frictions remain, with the macro atmosphere still awaiting clarity. Regarding the macro front, Maike Futures stated that the macro front is highly uncertain due to the trade war dynamics, but there may be increasing signs of a mid-term economic slowdown. As copper prices rebound to high levels, the macro environment has reverted to being a pressure factor.

Domestic copper concentrate TCs continue to decline, with the tight ore supply situation persisting. Jinrui Futures stated that as mining company financial reports are being released, the annual increase in copper concentrates has been revised down to around 410,000 tonnes, and the backdrop of tight raw material supply remains unchanged. Although there have been smelting maintenance activities in the smelting sector, the impact may be felt in May. In addition, there have been instances of smelting reductions overseas, with their raw materials potentially flowing into China. On the consumption side, downstream wire and cable enterprises reported strong order flows, with April's consumption resilience materializing and domestic social inventory maintaining a relatively fast destocking pace. Looking ahead, as the long holiday approaches, downstream stockpiling is expected to sustain strong short-term fundamentals, with prices potentially remaining resilient. However, there are concerns about weakening consumption in mid-to-late May, which is not conducive to a sustained upward movement in the price center.