1、 Trend analysis

Copper prices fell sharply this week. As of the end of the week, the spot copper price was 51480 yuan / T, down 0.98% from the beginning of the week, up 11.09% year-on-year and 4.99% higher than the beginning of the year. Recently, copper price fluctuated mainly.

Output reduced, copper concentrate supply tight

Chile reported a 4.6% year-on-year decrease in copper production in July and a 2% year-on-year decrease in Peru’s copper production, indicating that production has basically returned to normal, and the impact of the epidemic situation is not as large as expected. However, the epidemic situation in Peru has not been well controlled. Peru has announced that the state of emergency will be extended to October. In the future, the mine will operate inefficiently for a long time, and the production will still be affected. At present, the bidding price of concentrate for shipping in October is still lower than US $50, which means that the concentrate supply in the fourth quarter remains tight and the refinery production is in deficit, the output release is bound to be limited.

China’s copper demand is basically released in an all-round way

Due to the impact of health events, China has basically returned to work, and copper demand has been basically released. However, the health events in the United States have not been controlled, resulting in the short-term release of copper demand. European health events have been repeated, and it is not clear how far the recovery will be. The situation of India, Brazil and other countries with faster copper consumption growth is similar to that of the United States, while the situation of other Asian countries is slightly better. Generally speaking, since China accounts for half of the demand, the expectation of copper demand side is gradually recovering slowly compared with the serious health events in China.

Export volume of copper producing countries rebounded

The output of copper mines in Chile and Peru, the major copper producers, has improved, and the export supply has gradually rebounded. In July, the output of Codelco of Chile’s national copper industry decreased by 4.4% year-on-year, but the output of the Escondida copper mine of BHP Billiton, and the copper mines of Glencore and Anglo American resources increased.

In view of the above situation, affected by the public events, copper production and demand were affected at the same time. With the alleviation of the epidemic situation, copper production gradually increased. The output of Escondida copper mine, the world’s largest copper mine, increased by 3.8% in July. Peru’s copper production recovered from the downturn in the first half of the year, and the supply side exerted pressure. However, the peak season is coming, and domestic demand may increase month on month Copper price short-term high shock is strong.