US inflation data for August was released within 0 weeks, and both CPI and core CPI were higher than market expectations, disturbing the global capital market. Under the influence of the continued hawkish statements of the Federal Reserve in the early stage, stubborn inflation has strengthened the market's expectations for the strong rate hike of the United States in the later stage. According to the CMEFedWatch Tool, for the September FOMC meeting, the market expects a 75bp rate hike to reach 80%, which even opens up the possibility of a 100bp rate hike; for the federal funds rate upper limit, the previous 4% expectation was broken and raised to 4.75%. The Fed's interest rate meeting next Wednesday is worth paying attention to. The US dollar has maintained a strong overall trend, and copper prices at the macro level are still under pressure.
Spot
Although there is an expectation of concentrated inflow of imported copper on the supply side, the expectations on the consumer side are also not bad. It will enter the long-order delivery period next week, coupled with the demand for reserve inventory before the National Day, if copper prices fall further under the leadership of macro pressure, the willingness of downstream consumption will ease from the suppression of high premiums. It is expected that the domestic spot premium will remain high next week, with the contract for that month being 600-750 yuan/ton.
Copper price_Today's copper price trend chart_Copper spot price query_Shanghai Nonferrous Network
From the fundamentals, the risk of continuous squeezing overseas has been temporarily lifted, and the proportion of LME copper cancellation receipts has dropped from the previous high of nearly 50% to 12.62%, and the inventory has slowed down, and 0-3 back is expected to decline. The domestic spot tension pattern has not yet been broken, which can be seen from the back structure and high premium during the week.
However, it should be noted that although the market is telling the story of stock preparation before the "Golden September and Silver October" and National Day, if the spot premium continues to be high, domestic consumption will be damaged. This sign has been observed. SMM investigated that the high premium of copper spot spot this week has suppressed consumption to a certain extent, and the downstream is unwilling to accept excessive premiums, so it is more cautious to place orders. Many fine copper pole companies have also reported that new orders have weakened.
Overall, the pressure on copper prices at the macro level is still there, and the medium- and long-term logic of the pressure on copper prices due to the contraction of liquidity in the Federal Reserve has not reversed, focusing on the Fed's statement at the FOMC meeting next week. Whether the tight fundamental pattern can continue? As the expectation of supply growth is gradually confirmed by the market, consumption still needs to continue to improve, and the variables of terminal consumption and scrap copper supply need to be tested. It is expected that copper prices will fluctuate and weakly next week, with the operating range between 60,000-63,000 yuan/ton, and London copper between 7,500-7,900 US dollars/ton.
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