NOTE: There'll be no news updates over October 3-7 due to China's National Day holiday.
UTC+8 ( BJT)

Futures: Copper prices difficult to fall due to the end of the risk events expected

On September 23, SHFE Copper futures warehouse receipt is 5,256 tonnes, 1,430 tonnes less than the previous trading day; the cumulative decrease in the past week was 4,295 tonnes, a decrease of 44.97%; the cumulative increase in the past month was 2,077 tonnes, an increase of 65.34%.


The US Federal Reserve raised its target range for the federal funds rate by 75 basis points to between 3 percent and 3.25 percent this week. Fed officials' average forecasts for growth in the last four quarters was 0.2%, which decreased sharply from the 1.7% forecast in June, reflecting a more pessimistic outlook for the US economy. Copper prices did not fall sharply on the Fed's rate hike, mainly because the market has largely digested the expectation of 75 basis point hike.


Spot supply is gradually easing. The imported copper detained in the port in the early stage was concentrated cleared customs in this week. Production at smelters in many parts of China is also recovering. Enough supply and heavy financial pressure from traders at the end of the month have led to a decline in the spot premium in recent days. As there is only a week left before National Day, processing enterprises have entered the pre-holiday reserve state and have to accept high premium.


LME copper inventories have increased significantly, partly from China's bonded zones to Asian delivery warehouses, and partly by overseas traders to Europe.


At present, the operating rate of processing enterprises has rebounded, providing support for copper prices. With the end of the risk events expected, copper prices may be difficult to fall in the near future.


The current copper price is in a high fluctuation state, without obvious trend. Swing trading is recommended at Yuan 61,500-63,000/tonne. In view of the medium and long term is still in the recession cycle, it is recommended to short at every high point. Avoid too much long positions and pay more attention to risk control.




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