Summary of SMM Bronze Morning meeting on October 16th
[10. 16 SMM Bronze Morning meeting Summary] Macro aspect: 1) the Chinese Foreign Ministry confirms that China and the United States have reached a substantive economic and trade agreement in the first phase, but people familiar with the matter say that China hopes that the United States will abolish tariffs before it is possible to buy as much as $50 billion in agricultural goods. 2) the pound soared when EU and British negotiators were said to be close to reaching a draft Brexit agreement. 3) M2 in China increased by 8.4% in September from a year earlier, with an expected and previous value of 8.2%. A new RMB loan of 1.69 trillion yuan was added in September, with an expected increase of 1.42 trillion yuan, up from 1.21 trillion yuan. China's CPI rose 3 per cent in September from a year earlier, the biggest increase since November 2013 and is expected to be 2.8 per cent, up from 2.8 per cent. The people's Bank of China said the data had improved significantly and expected overall macro leverage to remain stable in the third quarter, with "special attention" to follow-up inflation on which there is no basis for sustained inflation and deflation. Fundamentals: 1) scrap copper: yesterday's fine scrap price difference is 762 yuan / ton. The price difference between refined and waste copper is narrowed, the price advantage of scrap copper is further weakened, and refined copper is used instead of scrap copper consumption. As the market is worried about the amount of scrap copper imported in the fourth quarter, further aggravating the market tension on the supply of scrap copper, holders cover their goods and wait for market guidance. 2) Import of copper: there was a loss of about 100 yuan / ton on imports yesterday. In the past two days, the import loss has been expanding, the market demand for goods has been reduced, the supply of goods in the hands of holders is relatively abundant, and the quotation of traders has been downgraded today after two days of strength, and low prices have attracted a small number of transactions. At present, the transaction price of fire warehouse bill is $83-85 / ton, wet bill of lading is about $74 / ton, fire bill of lading is about $78 / ton, second-card bill of lading is $84. About ton, the price of warehouse receipt bill of lading has been lowered, the market has become weak. 3) inventory: LME copper stocks were reduced by 2375 tons to 274975 tons on October 15. The stock of copper warehouse receipts in the previous period increased by 1199 tons to 62927 tons. 4) spot: due to the current full quotation of next month's ticket, driven by high inventory, the market quotation has dropped obviously. It is expected that the quotation will remain low today, with a rise of 40 yuan / ton in spot water. Copper price and forecast: last night copper price changes mainly due to investors slightly worried about the macroeconomic situation, cautious bullish mentality. At present, the British side announced that British and EU officials are close to reaching a Brexit agreement, the sharp rise in the pound has reached the 1.28 level, the dollar under pressure to explore the 98.2 level, a small advantage to the copper market; The Ministry of Foreign Affairs of China and the United States have confirmed that China and the United States have reached a substantive phased agreement. At the same time, the social and financial data recently released in China have exceeded expectations. On the whole, there is relatively more short-term good news, and the market risk aversion is weakening. CMX gold prices continued to fall to a low of US $1480 / oz, helping the copper market to rise slightly in the short term. At present, Shanghai copper cross star, below by the 10-day moving average support, copper prices are expected to fluctuate on the strong side today. The overall transaction situation remained deadlocked. It is estimated that today's copper 5750-5810 US dollars / ton, Shanghai copper 46800-47300 yuan / ton.
