Copper price

Shanghai Copper Main 2505 contract opened high and closed high on Tuesday, closing at 80,600 yuan as of 10:15 /Ton, an increase of 0.59%.The spot market transactions are relatively active, with the Yangtze River spot price of RMB 80,560 /Ton, up 490 yuan from the previous trading day /Ton, premium of 120 yuan /Tons, downstream traders need to enter the market, and some of them chase the rise, and the market atmosphere is getting warmer.

Macro-surface pressure and support coexist

US economic data continues to send recession signals: retail sales only rose 0.2% in February (expected 0.6%), the New York Fed manufacturing index plummeted to -20 (expected -0.75), and consumption and manufacturing industries are under dual pressure.China's industry from January to February /Consumption /Investment growth rates exceeded expectations, confirming the resilience of economic recovery.In terms of geopolitical aspects, Trump and Putin are about to negotiate a ceasefire in Ukraine, but the core contradiction between Russia and Ukraine has not been resolved. In addition, the US air strikes on Yemen have intensified the situation in the Red Sea, and the macro-level situation is showing a complex pattern of "weak US dollar and strong RMB" intertwined with geopolitical risks.

Supply and demand contradictions continue to ferment

Supply side, the world's largest copper company Codelco Warn that the output in the first quarter may be lower than expected. Although Indonesia's free port has obtained export quotas, the increase is limited. In addition, the domestic Tongling Group actively cuts production to deal with tight mines. TC Negative price value expanded to -$15 /Tons, the shortage of mines has strong support for prices.On the demand side, the domestic downstream operating rate rebounded seasonally, but high prices suppressed the ability to take over consumption, and spot premiums continued to confirm the tight balance between supply and demand.In terms of inventory, LME Copper inventory fell to 233,800 tons (new low in the past eight months), and domestic social inventory also sold slightly. The low inventory and the import window closed further push up price elasticity.

Professional organization perspective

Xinhu Futures pointed out that the problem of mine tightness is difficult to solve in the short term, and the maintenance of smelters may expand the supply gap, but the sustainability of downstream demand needs to be observed.Market insiders reminded that the strong price has approached the critical point of consumption tolerance, and the pace of inventory sales will determine the continuity of the rise.Focus on daily needs: 1) The impact of Trump-Putin call on geopolitical risk premium;2) The detailed implementation of domestic consumption promotion policies;3) LME Inventory changes and import window opening signals.

Operation suggestions

Short-term copper prices may maintain high fluctuations, with a reference to operating range of RMB 79,600-81,000 /Ton (main Shanghai copper), 9700-10,000 US dollars /Ton (Len Copper 3 M）. It is recommended that bulls hold it carefully, pay close attention to consumer feedback and the sustainability of inventory sales, and be wary of the risk of high-level pullbacks.