In late June, the global copper price experienced a sharp adjustment, the decline trend slowed down, and even showed a relatively strong momentum of rise, does this mean that the round of copper price adjustment from May to now has ended?
The author believes that this year's copper price peak has already occurred in May, and the possibility of copper price rising further in the future is very small, and it is difficult to surpass the 10-year high reached in May. As copper's supply and demand fundamentals have not deteriorated to a serious surplus, and the liquidity inflection point at the macro level has not triggered an economic recession or asset bubble burst, copper's low inventory, new energy consumption growth expectations support a resistant decline.
In the short term, the substantial adjustment of copper prices has triggered partial restocking and consumption recovery, which is reflected in the rebound of copper rod processing costs, the bottoming out of the import and onshore premium and the destocking of domestic copper explicit inventories in the off-season. In the medium term, the global high inflation environment is likely to peak, and while supply constraints will lead to high inflation, it is difficult for copper prices to make new highs, and the inflation trade logic for copper is fading away. Supply and demand level, copper supply recovery still needs time, copper concentrate processing costs after recovery is still at a historic low.
As a result, copper prices will continue to bubble in the next half month, but the decline will be slower and less smooth.
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