The Shanghai Futures Exchange's (SHFE) warehouse warrants for copper futures rose by 1,955 tonnes day on day to 104,607 tonnes on February 1, leading to a week-on-week increase of 17,425 tonnes or 19.99%, and an increase of 74,610 tonnes or 248.72% month on month.
SHFE copper prices fluctuated in the range of Yuan 68,800-69,800/tonne today. Market participants' expectations for the US economy improved. At the same time, they expected that there would be only 25 basis points left after the interest rates hiking by 25 basis points in February. Therefore, more market participants turned optimistic about copper prices. Meanwhile, China's PMI rose to 50.1%, specifically, new orders in the market increased significantly.
China's copper downstream enterprises have begun to resume production. According to Mysteel's survey, in the first week after the Spring Festival, the social inventory accumulation of refined copper in China was only 43.27%, not as high as that in the same period of previous years, such as 62% in 2021 and 89.68% in 2022. Although the Spring Festival holiday of downstream enterprises was longer, the current situation of inventory accumulation is about to be eased, so the pressure of inventory on copper price is limited. However, after the recent macroeconomic data release, copper prices may fall slightly due to the lack of practical bullish news.
Copper prices have risen to the fluctuation range of the previous high, and the rising trend is expected to slow down. Under the influence of expected economic recovery and still light transactions in China, the copper price is expected to fluctuate in the range of Yuan 68,000-72,000/tonne in the short term. Recovery of the global economy and the increasing demand for copper in the new energy industry will make copper prices in a long-term upward trend.
Data Source: SHFE
Data Source: SHFE
Written by Edenlis Huang, huangting@mysteel.com
Edited by Ting Ao, aoting@mysteel.com