Sino-US Trade Contradictions Convergence Copper Price Supported by Brin's Lower Track
In European trading last Friday night, Luntong continued its decline, falling from $6,175/ton above the daily average. Until entering the U.S. market, the decline slowed to a low of 6,106 U.S. dollars per ton. Later, due to positive trade comments from China, short sellers took the opportunity to leave the market, and copper prices rebounded, closing at 6,112.5 U.S. dollars per ton, up 0.08% in a day, with 17,840 trading volumes and 11,120 to 291,000 positions reduced.
On Friday night, the 1907 contract of Shanghai copper main force opened at 47760 yuan/ton. After the opening, the daily average remained stable, with the initial amplitude not exceeding 90 yuan/ton. After that, influenced by the external market, many investors entered the market actively. Copper prices surged after reaching a low of 47710 yuan/ton until reaching a high of 47950 yuan/ton at the end of the market, closing at 47880 yuan/ton, up 0.25% at night. The Shanghai copper index traded 77666 hands, with positions down 1342 to 545,000. On Friday night, the market reacted positively to China's favorable remarks on Sino-US trade, and copper prices rebounded and rose.
The nonferrous metals showed a weak performance this morning, and the market's optimism about Sino-US trade has been digested. The economic data released today are light and difficult to provide guidance for the market. Copper prices are expected to remain low and volatile today. Technically speaking, Luntong and Shanghai Copper are both supported by Brin's lower rail and are expected to stabilize here today. Spot prices are expected to close to the delivery level before the delivery date. Judging from the recent transaction response, the transaction performance is mediocre despite the weak disk price. In addition, the recent opening of the import window and the entry of foreign trade copper into the market have triggered the selling sentiment of the goods holders. Therefore, after delivery, the spot quotation is expected to be significantly lowered. It is estimated that today Luntong is 6080-6130 USD/ton, Shanghai copper is 47650-48000 RMB/ton, and the spot level water-premium 100 yuan/ton.
Highlights of Copper Market:
1. Aurelia Metals Ltd, an Australian mining company, said it had given up negotiations to acquire Glencore's CSA copper mine in New South Wales. Aeris Resources Ltd, a smaller competitor, said last month that it could not reach an agreement with Glencore to acquire CSA Copper Mine for US$ 575 million.
2. Nevada Copper announced a series of deals to finance its 100% owned Pumpkin Hollow copper project, which is expected to be completed in the last quarter of this year. Matthew Gili, CEO of Nevada Copper, said in a press release, "We are very pleased to be able to work with various off-take partners and working capital suppliers to put this underground project into production later this year."
Looking ahead to the future, the market has always been optimistic about China's domestic demand, which is the main factor hindering the decline of copper prices in the short term. CRU Group, a commodity analyst, said it expected a supply gap of 41,000 tons in the global copper market this year. Investment banks such as Citi, Morgan Stanley and Goldman Sachs all expect a supply gap in the copper market in the future. In view of the possible improvement in China's demand, the overall copper position is still relatively light and there is support below the copper price. Next week, the spot market will enter a trading cycle. It is difficult to offer a discount for the time being, but the supply and demand performance is difficult to improve. It is expected that the copper price will fluctuate.
Source: Global Metal Net