Copper prices fluctuated and fell in July

1、 Trend analysis

According to monitoring data from Shengyi Society, copper prices showed an “M” – shaped trend in July. At the beginning of the month, the copper price was 80235 yuan/ton. At the end of the month, the copper price fell to 79538.33 yuan/ton, with an overall decline of 0.87% and a year-on-year increase of 8.51%.
According to the current chart of Shengyi Society, the spot price of copper in July was basically higher than the futures price, and the main contract is the expected price two months later. The expected future price may be under pressure.
According to LME inventory, LME copper inventory increased significantly in July. As of the end of the month, LME copper inventory was 124775 tons, up 36.7% from the beginning of the month.
Macroscopically, in early July, the Trump administration announced the decision to impose a 50% tariff on imported copper starting from August 1st, which caused the copper market to rise first and then fall in July. The current focus is on the 50% metal import tariff that the US will implement next Friday. The tariff rate is very high and the implementation window is very short, especially for copper products, which has not yet been fully clarified, causing a severe shock in the global copper market.
Supply side: Overseas mining disturbances continue, and traders are accelerating their shipments to the US before August 1st, resulting in tight spot supply. Copper concentrate spot TC continues to fluctuate in the negative range.
Downstream: The overall operating rate of cable companies remains stable, and home appliance sales are boosted by national subsidy policies and 618 promotions (refrigerators and air conditioners have performed well). The high production and sales of new energy vehicles continue to drive copper demand. However, in the current off-season of the industry, spot consumption is weak, and the off-season atmosphere on the demand side is deep, resulting in low actual purchasing sentiment downstream.
According to the annual price comparison chart of Shengyi Society, copper prices have increased more or less in August in the past five years, and there is uncertainty in copper prices in August this year due to the impact of tariffs.
In summary, the current tight supply situation in overseas mining has not changed, and domestic copper concentrate processing fees remain low. Coupled with the low social inventory of copper in Shanghai and active transactions in the spot market, the tight supply of goods and downstream replenishment at low prices have formed support. However, global macro uncertainty and policy turning points are approaching, and it is expected that copper prices will mainly experience strong fluctuations.