The Shanghai Futures Exchange's (SHFE) warehouse warrants for copper futures fell by 14 tonnes day on day to 133,795 tonnes on February 22, leading to a week-on-week increase of 1,791 tonnes or 1.36%, and an increase of 46,613 tonnes or 53.47% month on month.
The SHFE copper price remained above Yuan 70,000/tonne, while China's refined copper premiums fell slightly again by about Yuan 20/tonne. The US composite PMI rose by 3.4 month on month to 50.2 in February, hitting an eight-month high. Although the manufacturing PMI was still only 47.8, it was also higher than the previous 46.9 and the expected 47.2. The improvement of economic data gave the Federal Reserve firmer reasons to raise interest rates, but the expectation of economic recovery also strengthened the confidence of market participants.
However, the expectation of China's economic resurgence and demand recovery has not been completely verified. After the centralized replenishment last week, the purchase of downstream this week slowed down due to high copper prices. Although market participants are full of confidence in the demand for real estate, new energy, and other industries, the high social inventory in the short term will hinder the further rise of copper prices. Although more maintenance of China's smelters in the first half of the year will affect the output, it is expected that the overall output will grow.
Overall, macroeconomic uncertainty, inventory data, and physical transactions will be key interfering factors for copper prices in February. Under the background of sufficient supply, whether the demand increases as expected will be one of the key factors affecting copper prices.
Data source: SHFE
Data source: SHFE
Written by Edenlis Huang, email@example.com
Edited by Ting Ao, firstname.lastname@example.org