The Shanghai Futures Exchange's (SHFE) warehouse warrants for copper futures fell by 2,470 tonnes day on day to 89,714 tonnes on March 22, leading to a week-on-week decrease of 29,633 tonnes or 24.83%, and a decrease of 41,373 tonnes or 31.56% month on month.
SHFE copper price rose back to about Yuan 68,100/tonne today, while premiums of refined copper in China's main markets generally remain unchanged. US Treasury Secretary Yellen promised to assist more small and medium-sized banks to prevent the spread of risks, which eased the risk aversion among market participants, leading to the rise in copper prices today. Federal Reserve Chairman Powell will announce a decision to raise interest rates tonight, but copper prices have already reflected expectations of 25 basis points in advance.
China's copper demand keeps rebounding, reflecting the accelerated decline in copper social inventories this week. It is expected that China's copper social inventory will be consumed at a rate of 80-100 kt per month during the peak season for new energy and power infrastructure in March-May, which will also lead the global copper inventory to a return to historical lows. The composite copper foil industry is at the end of the PET material validation period, and its orders are expected to expand extensively. It is expected to improve the safety and cruising range of lithium batteries for new energy vehicles in the long term, which will boost copper demand.
In summary, the easing of the macroeconomic crisis and the deterministic growth of demand in both the short and long term will continue to support copper prices. But it is still necessary to pay attention to the impact of the Federal Reserve's interest rate hikes.
Data Source: SHFE
Data Source: SHFE
Written by Edenlis Huang, huangting@mysteel.com
Edited by Ting Ao, aoting@mysteel.com