This week, the copper market fluctuated at high levels (2.2-2.6)

1、 Trend analysis

According to monitoring data from Shengyi Society, copper prices first rose and then fell this week. As of the 6th, copper prices were reported at 100035 yuan/ton, a decrease of 0.81% from the beginning of the week and a year-on-year increase of 31.01%.
In the past three months, copper prices have fallen by 6 and risen by 6, with a slight decrease this week.
LME copper inventory
According to data released by the London Metal Exchange (LME). LME copper inventory has slightly increased, with 180575 tons of LME copper inventory as of the weekend, up 3.4% from the beginning of the week.
Macroscopically, ADP employment in the United States only increased by 22000 in January, and market expectations of a Fed interest rate cut cooled. The US dollar index rebounded nearly 98%, suppressing copper prices denominated in US dollars.
On the supply side, factors such as declining production capacity of old mines, long development cycles of new mines (average 7-10 years), and rising ESG costs will limit the growth of copper mine production. The global supply and demand gap for copper concentrate may widen to 500000 tons by 2025, supporting the upward shift of the copper price center.
On the demand side: As the Spring Festival approaches, domestic copper processing enterprises are gradually entering a shutdown and holiday period, and the operating rates of downstream industries such as wire and cable, copper pipes, and copper strips continue to decline. This week, the operating rate of domestic copper rod enterprises has dropped to 58%, a decrease of 12 percentage points from the peak in January. Although some companies have engaged in “pre holiday stocking” behavior, the recent decline in copper prices (down more than 5% from the January high) has not significantly stimulated procurement demand.
In summary, from a long-term perspective, copper prices still have a solid foundation for upward movement. In terms of overseas mines, it is common for old mines to close and new mines to be delayed in production, resulting in tight supply of copper concentrate and extremely low processing fees, which fully indicates the relative scarcity of copper resources. At the same time, the rapid development of new energy vehicles and the rise of artificial intelligence have led to a sustained increase in demand for copper consumption. Therefore, the current correction in copper prices can be seen as a brief pause after a surge, and it is expected to show a fluctuating trend at high levels in the future.