News summary

Shanghai copper prices undergo adjustmentbaccarateyevotive, the Federal Reserve hinted that high interest rates would remain, and UK CPI growth slowed less than expected. The market adjusted expectations for interest rate cuts, and overseas macro factors affected the non-ferrous sector. COMEX copper inventories have decreased, but the risk of closing positions needs to be paid attention to. There is limited room for a correction in copper prices, and support may be found in the mid-track of the Bollinger Band in the short term.

Newsletter text

[Copper price adjustment is affected by multiple factors] Recently, copper prices have experienced a round of high correction.

Markets were deeply influenced by the Federal Reserve's minutes, which hinted at the persistence of high interest rates, and the move did not show the urgency of reducing borrowing costs in the short term. At the same time, the UK's CPI growth in April did not slow as expected, causing market expectations for the Bank of England to cut interest rates to cool.

International macroeconomic headwinds have put pressure on the non-ferrous metals sector, especially the COMEX copper market. The continued trend of reducing positions has intensified the downward trend of copper prices. With the reduction of inventory, although the risk of forced positions has temporarily eased, the alarm of low inventory has not yet been completely lifted.

The spread between COMEX and LME copper has narrowed, and the decline in overseas copper prices in this adjustment exceeds that in the domestic market. The decline in copper prices has stimulated downstream purchasing sentiment, and the discount situation in the domestic spot market has also improved.

Although market sentiment has been affected by potential rumors of a large number of overseas settlement positions, the continued decline in COMEX market inventories suggests that the risk of tight positions still needs to be closely watched.

The medium-term outlook for copper supply and demand fundamentals and the macro environment indicate that supporting factors for copper prices still exist, and it is expected that there is little room for possible correction in copper prices. Short-term investors may need to pay attention to the support situation near the mid-track of the Bollinger Band.