Weak supply and demand, Copper prices mainly fluctuate widely

1、 Trend analysis

According to monitoring data from Shengyi Society, copper prices have fluctuated widely this week. As of the 24th, copper prices were reported at 102618 yuan/ton, a decrease of 0.28% from the beginning of the week and a year-on-year increase of 31.36%.
According to the weekly rise and fall chart of Shengyi Society, in the past three months, copper prices have fallen by 7 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 decreased, with 396000 tons of LME copper inventory as of the weekend, down 0.61% from the beginning of the week.
Macroscopically, the initial value of the US manufacturing PMI in April directly hit 54.0, far exceeding expectations and setting a new high in nearly four years. What does this mean? The US economy is so hot that there is no need for the Federal Reserve to urgently cut interest rates. The employment data is also very hard, with only a slight increase in the number of initial jobless claims. The US dollar index rebounded in response, approaching the 99 level, and the US stock market closed down across the board. For non-ferrous metals priced in US dollars, this is undoubtedly a blow.
Supply side: The acid shortage problem in Chile and the Democratic Republic of Congo continues to ferment, and the accident at the Grasberg mine in Indonesia casts a shadow over the recovery of production capacity in the second half of the year. Although the news of the resumption of production at the Lu’anxia copper mine in Zambia has brought a slight easing, the global surplus reversal predicted by ICSG indicates that the background of tight supply-demand balance remains unchanged.
On the demand side: The traditional sector is showing signs of fatigue, with insufficient consumption of “gold, silver, and four”. Traditional consumer sectors such as real estate, construction engineering, infrastructure construction, and white goods have shown sluggish performance. Due to limited profit margins in these industries, it is difficult to digest the pressure of raw material costs of up to 100000 yuan, which in turn has a very limited driving effect on copper consumption. However, the explosive power of emerging fields is filling this gap. According to data from the International Energy Agency, the global increase in photovoltaic power generation leads renewable energy, coupled with the construction of domestic AI computing centers, the expansion of PCB production, and the strong growth of “new three types” exports (electric vehicle, lithium battery, and solar cell exports increased by 77.5%, 50.4%, and 30.5% respectively in the first quarter), opening up a new growth pole for copper consumption. In addition, the double increase in the transaction area of new and second-hand houses in 10 key cities last week also revealed a weak signal of recovery in the real estate sector.
In summary, copper prices are currently in a game of “strong expectations” and “weak reality”. Goldman Sachs maintains its forecast of copper oversupply in 2026, but also warns of supply risks that may arise from sulfuric acid shortages. The upper part is constrained by the fear of high spot prices and the strength of the US dollar, while the lower part is supported by the shortage of mining resources and geopolitical risks. There is no basis for unilateral skyrocketing or plummeting. For the future market, short-term copper prices are likely to experience wide range fluctuations.