COMEX copper prices rebounded sharply last week and recovered significantly in the first half of the week. Sentiment clearly recovered from the previous riskoff, pushing copper prices back to $4.50 / lb. However, on Friday sentiment changed dramatically after the outbreak of a new variant of the virus, and risk assets fell sharply, copper prices also fell under pressure, giving up most of the week's gains. At present, the possible subsequent impact of the new virus still needs to be observed, but from the current known situation, its comprehensive impact may not be stronger than that of Delta outbreak, so it may not be considered to bring a very serious impact on copper prices, on the contrary, if the virus is confirmed not to cause an increase in severe illness and mortality. The rebound is likely to bring some correction to copper's decline.
Last week COMEX copper price curve compared to the previous downward displacement, the back structure of the near end of the price curve changed to contango structure, mainly because of the recent increase in the explicit inventory of refined copper in North America, there are major market players moving goods to the United States, the market began to worry that the global refined copper inventory may have bottomed out. However, we believe that the low inventory state will probably continue, but in the short term, it will bring some disturbance to the near end of the price curve, which is also a test of consumption. Based on this consideration, we believe that the duration of contango structure will not be too long, and the price curve may remain in the back state for more time. Therefore, we can still consider taking borrow positions at appropriate times.
SHFE copper prices last week after magnified first, the first half of the week domestic industrial rebound out of the whole structure, mainly lies in the domestic will relax property related to a certain extent credit rumors have been filled, market sentiment rebounded, the relaxation of the real estate related credit may help clubs bottoming out, the credit pulse back up, so the copper price has also been a boost. But the spot market has shown significant weakness in prices since last week, the premium has been significantly restrained, the market sentiment is not high, and Friday also showed a significant decline under the impact of negative overseas sentiment. We believe that copper prices in the first wave of credit easing signal after the digestion of the push, need to re-enter the adjustment waiting for new guidance, the change of overseas mutant virus will also bring some disturbance to it, but the low inventory problem may still be difficult to solve for the time being, so the probability of maintaining high volatility is not small.
SHFE copper price curve last week compared to the previous overall displacement upward, the near end of the price curve continues to maintain back structure, but back structure convergence. After hitting a historic high of more than 2,000 yuan per ton in the spot market, premiums began to fall rapidly last week. The historic premium is closely related to the existing gap, as well as the recent delay in issuing VAT invoices for imports. But last week, the issue of copper invoice for imports began to partially ease, imports of goods gradually into the domestic market, flat market premium. Of course, the current domestic inventory will still be hovering at a low level, in the fine copper tension at the same time, the current domestic scrap copper supply is still tight, and at present after the absolute price of fine copper fall, scrap copper supply and demand becomes tight again, at the same time, domestic smelting enterprises in the organization of goods export to overseas, will also be conducive to domestic dewarehousing. Shanghai Copper will maintain the back structure as a whole.
