On October 11, SHFE Copper futures warehouse receipt was 4,556 tonnes, 827 tonnes more than the previous trading day; the cumulative increase in the past week was 827 tonnes, an increase of 22.18%; the cumulative increase in the past month was 1,108 tonnes, an increase of 32.13%.
SHFE copper prices were going higher today. Pessimistic macro data have sharply raised the probability of another aggressive Fed interest rate hike in November and reversing market expectations of a slowdown in monetary tightening policies of European and US central banks.
In the Chinese market, the policy to stabilize growth remains the main factor on copper consumption. However, the recurrence of the epidemic in many regions of China after the National Day holiday imposed a negative impact on the consumer sentiment. Global and China's copper inventories rebounded during the National Day holiday. But the LME premiums fell while China's spot premiums rose, which showed the fundamental differences. The fundamental pattern of strong domestic and weak overseas is still continuing and has the potential to intensify. However, copper consumption in China is now showing a cautious trend. After October, the consumption peak season will gradually end, coupled with China's copper production recovery, the strong domestic fundamentals will be difficult to continue in the long term.
Overall, the current macro and fundamental outlooks are still not optimistic, lacking factors to promote copper prices upward. It is recommended to hold short position or increase short position when price rebounds.
Data source: SHFE
Data source: SHFE
For queries and more information/data/reports access, please contact Paula Xu at xuzhongping@mysteel.com