SMM

News: (1) Federal Reserve officials hawkish, hinting at a slowdown in the pace of interest rate cuts, the number of dollar rate cuts is expected to be reduced to 2-3, and U.S. Treasury yields are higher. (2) In 2023, all the projects for the issuance of additional treasury bonds of 1 trillion yuan will be completed, mainly including the post-disaster recovery and reconstruction of North China with the focus on the Beijing-Tianjin-Wing and the improvement of disaster prevention and mitigation capabilities, the project of improving the emergency response capacity of natural disasters, and the construction of a comprehensive prevention and control system for key natural disasters.
Spot: (1) Shanghai: On February 7, 1# electrolytic copper reported a discount of 30 yuan/ton - a premium of 20 yuan/ton for the 2402 contract of the month, and the average price was quoted at a discount of 5 yuan/ton, down 25 yuan/ton from the previous month. Today is the last trading day before the Spring Festival, and the spot market is expected to remain cold, and the price of the holder may provide guidance for the premium after the year, and the premium is expected to stabilize and operate.
(2) Guangdong: On February 7, the spot price of Guangdong 1# electrolytic copper was quoted at a premium of 0 yuan/ton - a premium of 50 yuan/ton for the current month, with an average premium of 25 yuan/ton, which was flat month-on-month. Overall, the market is cold and the pre-holiday atmosphere is strong, and there are only sporadic purchases.
(3) Imported copper: the warehouse receipt price on February 7 was 43-55 US dollars/ton, and in QP February, the average price fell by 1 US dollar/ton month-on-month; The bill of lading price was 40-55 US dollars / ton, QP March, the average price was flat month-on-month; EQ copper (CIF bill of lading) 4-8 US dollars / ton, QP March, the average price is flat month-on-month, and the quotation refers to the supply of goods arriving in Hong Kong in mid-February and late February. Yesterday, the two brands were still reported at 75 US dollars / ton, and the wet process was reported at 60 US dollars / ton, overseas consumption continued to be weak, and the LME spot showed a historic discount, which undoubtedly gave the holders confidence in the price. However, most traders in the market have started the holiday mode, and it is difficult to smell the real deal.
(4) Recycled copper: On February 7, the price of bright copper in Guangdong was 62,600-62,800 yuan/ton, unchanged from the previous month, the price difference of refined waste was 1,496 yuan/ton, down 55 yuan/ton from the previous month, and the price difference of refined waste rod was 405 yuan/ton. According to SMM research, the operating rate of recycled copper rods this week was only 4.3%, and only individual enterprises were left to produce until February 6, after which all sample enterprises began to take holidays.
(5) Inventory: LME copper inventory decreased by 950 tons to 137,850 tons on February 7; On February 7, the inventory of warehouse receipts on the Shanghai Futures Exchange increased by 3,537 tons to 38,219 tons.
Prices: On the macro front, copper prices came under pressure due to the slightly higher dollar index and the sluggish domestic consumption before the Chinese New Year. In terms of fundamentals, from the perspective of consumption, on the last trading day before the Spring Festival, most companies have entered the Spring Festival holiday, and there is almost no transaction in the market. On the whole, the supply side remains loose, and the state of "price but no market" continues. In terms of prices, on the whole, domestic demand is cold before the holiday, which is expected to drag down copper prices to a certain extent.