News summary
Shanghai copper's main contract fell 4bingocc.15% to 83080 yuan/ton, spot market trading picked up, and premium expectations only rose slightly. Minutes of the Federal Reserve meeting showed a slowing pace of easing inflationary pressures. U.S. copper trading positions are expected to increase, and copper prices are expected to fluctuate greatly in the near future and tend to consolidate. It is recommended to wait and see for the time being and wait for the opportunity to enter.
Newsletter text
[Market Review] Shanghai copper prices fell sharply today, closing at 83080 yuan/ton, down 3600 yuan/ton from the previous trading day, a drop of 4.15%. Market sentiment was severely affected, and positions in the Shanghai copper index decreased by 11,900 lots to a total of 610,000 lots.
[Spot Market Trends] Spot copper prices also suffered a sharp drop, and market trading activity increased significantly. Despite the influx of a large amount of imported copper, domestic social inventories remain at a high level. Under the pressure of price cuts, the spot trading market has gradually shifted to the buyer's market, and the premium is expected to increase only slightly in the short term.
[Analysis of Important Information] The latest meeting minutes released by the Federal Reserve revealed policymakers 'dissatisfaction with recent inflation data. Still, they firmly believe that price pressures will gradually ease, although the process may be slow. The focus of the debate at the meeting was the moderately restrictive nature of monetary policy in the context of economic growth, which is related to the effectiveness of policies in cooling inflation. In addition, following the release of the minutes, market participants reduced expectations that the Fed would cut interest rates more than once this year.
[Logistics update] Sources revealed that more than 20000 tons of Chilean copper are expected to arrive in the United States by the end of May, and more copper materials will arrive in June and July. Short positions have arranged for the production and transportation of copper from Chile and Peru to the United States, changingbingoccThe flow of goods originally shipped to China under long-term contracts was checked and some copper stocks were extracted from warehouses registered on the London Metal Exchange. It is estimated that at least 100,000 tons of copper are being transferred to COMEX registered warehouses, which will effectively reduce the pressure of closing positions.
[Logical Analysis] With the cooling of the Federal Reserve's interest rate cut expectations and the strengthening of expectations for U.S. copper trading positions, COMEX's July contract positions still reached 156,000 lots, most of which were non-commercial positions. It is expected that most positions will be closed before the end of June, which may cause large fluctuations in copper prices. In the short term, copper prices may enter the consolidation stage.
[Trading Strategy Suggestions] Currently, investors are advised to maintain a wait-and-see attitude and wait for copper prices to adjust to a more favorable entry point. At the same time, arbitrage and options trading also advise investors to stay on the sidelines. For options trading, they can continue to hold the strategy of selling CU2406-P-76000.