The Shanghai Futures Exchange's (SHFE) warehouse warrants for copper futures fell by 990 tonnes day on day to 142,024 tonnes on March 2, leading to a week-on-week increase of 2,033 tonnes or 1.45%, and an increase of 39,372 tonnes or 38.35% month on month.
SHFE copper price fell back to about Yuan 69,700/tonne today, while the refined copper discount in China's main markets narrowed by Yuan 10-40/tonne. The strengthening of the expectation of the Federal Reserve's interest rate increase is still restraining copper prices. The yield of a 10-year US treasury bond exceeded 4% for the first time since November 2022, which means that market participants are inclined that the Federal Reserve will raise interest rates to around 5.5% in September.
Contrary to the uncertainty of the macro economy, market participants hold a bullish expectation for the upcoming National People's Congress and the Chinese Political Consultative Conference (NPC&CPPCC) in China. People are very confident that NPC&CPPCC will play a positive role in the economy and copper demand. According to Mysteel's survey, the operating rate of most of China's copper semis processing enterprises recovered to a high level, preparing for the upcoming peak demand season.
In general, as the expectation of an interest rate increase is gradually digested by the market, while the expectation of China's economic recovery is gradually verified, it is expected that copper prices will keep strong in the long term.
Data Source: SHFE
Data Source: SHFE
Written by Edenlis Huang, huangting@mysteel.com
Edited by Ting Ao, aoting@mysteel.com