The Shanghai Futures Exchange's (SHFE) warehouse warrants for copper futures rose by 4,251 tonnes day on day to 30,753 tonnes on June 15, leading to a week-on-week decrease of 5,827 tonnes or 15.93%, and a decrease of 30,913 tonnes or 50.13% month on month.
SHFE copper price rose to about Yuan 67,900/tonne today, while premiums of refined copper in East China rose by Yuan 35/tonne.
The Federal Reserve suspended interest rate hikes in June as expected, in line with market expectations and copper prices remained stable today. However, according to the economic forecast summary released by the Federal Reserve, the median expected interest rate at the end of 2023 is 5.6%, higher than 5.1% in March.
Federal Reserve Chairman Powell made relatively mild remarks, pointing out that whether to raise interest rates in July has not yet been decided. This statement eased the market concerns so that the US Dollar Index and non-ferrous metal prices kept stable today.
The reduction of interest rates by the People's Bank of China's reverse repurchases and Medium-term Lending Facility (MLF) has sparked optimism in the market, supporting the rise in copper prices along with the easing of overseas macroeconomic conditions.
According to Mysteel's survey, the intensive maintenance of Chinese copper smelters will be basically completed in late June, with only sporadic maintenance thereafter. Although China's refined copper output in June is expected to decrease month on month to 913,000 tonnes, it maintains a high growth rate of 3.65% year on year.
Current high copper prices have suppressed the demand of downstream enterprises and boosted the substitutability of secondary copper. In the context of the rapid rise in LME (London Metal Exchange) copper cancelled warranties proportion, it is expected that domestic spot supply will be looser in the short term, thereby suppressing copper prices. The risk of a fall in copper prices after contracts rolling needs to be given special attention.
Data Source: SHFE
Data Source: SHFE
Written by Edenlis Huang, huangting@mysteel.com
Edited by Ting Ao, aoting@mysteel.com