The average price of Shanghai Futures Exchange (SHFE) copper continued to rise to more than Yuan 65,000/tonne within December and copper bar prices maintained in high level, due to the confirmation of the results of the Federal Reserve's interest rate increase in December and the release of dovish opinions.
According to Mysteel's assessment, the price of mainstream brand HPb59-1 brass bar and H62 brass bar in Ningbo increased by Yuan 500/tonne or 1.04% and Yuan 200/tonne or 0.37% month on month respectively to Yuan 48,400/tonne and Yuan 54,600/tonne on December 29. The price of HPb59-1 brass bar fluctuated as an "N" shape in the narrow range of Yuan 47,900~48,700/tonne in December.
While copper bar prices in China are expected to decline slightly in January 2023 under weak demand and supply in the short term.
Data Source: Mysteel
China's copper bar transactions are relatively light near the end of the year. The weak demand for end-users leads to the decline of reserves. In addition, due to the current high copper price, many end-users are bearish on copper price, so they do not purchase so much at present.
Although the epidemic control policy continues to be optimized, the purchase of copper bars in the market continues to decrease. Most downstream enterprises plan to take holidays in advance, so the overall demand will continue to decrease, which has led to more fierce competition among processing enterprises. In order to reduce inventory and reserve cash flow, processing enterprises are more inclined to cut prices for sale.
Written by Edenlis Huang, huangting@mysteel.com
Edited by Paula Xu, xuzhongping@mysteel.com