Spot copper is no longer strong, copper loss support or callback

Abstract In the past two days, the spot copper premium in Shanghai has fallen sharply. From the highest level of nearly 600 yesterday to the current level of 300 yuan/ton, there is still the possibility of further decline. Previously, a wave of smelters reduced production and maintenance, which made the supply of refined copper in the market “tight”. Traders actively moved goods and pulled up the water;
In the past two days, the spot copper premium in Shanghai has fallen sharply. From the highest level of nearly 600 yesterday to the current level of 300 yuan/ton, there is still the possibility of further decline. Previously, a wave of smelters reduced production and maintenance, which made the supply of refined copper in the market “tight”. Traders actively moved goods and lifted up the water; and along with the US dollar copper imports, they were profitable. According to the Fubao database, the highest profit reached 527 yuan/ton. On the other hand, we learned from the spot market that with the increase in water and import profits, some of the US dollar copper imports have increased, and the supply in the trade market is no longer tight, suppressing high water.

Previous comments have already indicated that high waters cannot continue. Although scrap copper prices are strong enough to support copper prices, smelter production restrictions have reduced supply. However, under the support of high TC/RC, domestic demand for copper concentrate is huge, and supply of refined copper is still at a historically high level; and as the Indian smelter returns to work, foreign copper imports are expected to increase. On the other hand, although the SAFE has strictly investigated the trade suppression financing, it has limited impact on the “no water” financing trade. In this favorable import environment, the willingness to re-export will weaken and increase the domestic copper supply.

With the fall of high water, the support for copper will be weakened; and copper mines with problems in foreign countries will start to work, causing supply pressure and insufficient fundamentals. On the technical side, today's copper price has fallen below the important support of the 20-day moving average. If the closing copper price cannot return to more than 52,500, the possibility of a new round of correction will increase, and futures can be tested, and downstream enterprises can delay buying.

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