The Shanghai Futures Exchange's (SHFE) warehouse warrants for copper futures fell by 1,861 tonnes day on day to 138,696 tonnes on March 6, leading to a week-on-week decrease of 1,546 tonnes or 1.1%, and an increase of 28,310 tonnes or 25.65% month on month.
SHFE copper price fell slightly to about Yuan 69,300/tonne today, while the refined copper discount in China's major markets remained almost unchanged. The PMI of manufacturing and service industries in the US increased and exceeded market expectations in February, and the index of new orders reached the highest level in nearly a year. The Federal Reserve's monetary policy report showed that it was appropriate to continue to raise interest rates. The work report of the Chinese government pointed out that the GDP growth rate in 2023 would be 5%, slightly lower than the 5-5.5% expected by the market. Therefore, after the positive expectations have been reflected in the price in advance, the current copper prices are under pressure.
However, overseas copper mines are frequently disturbed, which inhibits supply. March to May will be the period of centralized maintenance of China's copper smelters and also will be the peak season of demand, so the social inventory is expected to be significantly consumed. The operating rate of processing enterprises has reached a high level.
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 stay strong in short term.
Data Source: SHFE
Data Source: SHFE
Written by Edenlis Huang, huangting@mysteel.com
Edited by Ting Ao, aoting@mysteel.com