The Shanghai Futures Exchange's (SHFE) warehouse warrants for copper futures fell by 757 tonnes day on day to 71,301 tonnes on March 31, leading to a week-on-week decrease of 10,691 tonnes or 13.04%, and a decrease of 71,713 tonnes or 50.14% month on month.
SHFE copper price fell to about Yuan 69,300/tonne today, while premiums of refined copper in China's main markets generally rose by Yuan 10-20/tonne from last trading day. Federal Reserve official Collins pointed out that as the US banking crisis subsides, further interest rate hikes to curb inflation are still necessary. The hawkish viewpoint sparked concerns among market participants about further hiking. The US Initial Claims, GDP expectations, and many other economic indicators indicate that the global economy has entered a downward trend.
With the easing of interference, Las Bambas copper mine in Peru resumed full load operation, ending the downward trend of copper concentrate TC and pushing it to above $80/dmt, indicating a relief in supply. Although there were three smelters in China conducting maintenance in March, and there are still smelters that will intensively undergo maintenance in April, a temporary slowdown in demand has alleviated the supply pressure. According to Mysteel's survey, China's refined copper social inventory rose by 5,800 tonnes from Monday to 200,100 tonnes on Thursday, which was the first increase since February 23. However, the recovery of China's real estate and home appliance industries is expected to continue to support copper demand in the second quarter.
In summary, copper prices are still strongly supported by demand, but a new round of interest rate hikes overseas is expected to inhibit long-term economic development. Copper prices are expected to retreat in short term.
Data Source: SHFE
Data Source: SHFE
Written by Edenlis Huang, huangting@mysteel.com
Edited by Ting Ao, aoting@mysteel.com