1、 Trend analysis

According to monitoring data from Business Society, copper prices fluctuated and fell in May, with a price of 67431.67 yuan/ton at the beginning of the month and 65735 yuan/ton at the end of the month. The overall decline was 2.52%, a year-on-year decrease of 9.46%.

According to the current chart of the Business Society, copper futures prices in May were generally higher than spot prices, with the main contract being the expected price in two months, and the overall copper market in May was bearish. Towards the end of the month, the main basis decreases, which is good for buying hedging.

According to LME inventory, LME copper inventory slightly increased in May, suppressing copper prices.

Macroscopically, the Bank of England announced a 25 basis point hike in its benchmark interest rate to 4.5%, and stated that further tightening of monetary policy is needed if there is more holding pressure on inflation. The total number of completed home sales in the United States in April was 4.28 million, a decrease of 3.4% month on month, lower than the expected -3.2% and -2.6%, the largest month on month decline in 11 years. The US debt ceiling negotiation was fruitless, and the economic outlook was worrying. On June 1, the US was forced to default because it would be unable to fulfill its payment promise, which made the global risk appetite panic. Federal Reserve officials are mixed and uncertain about whether to raise interest rates in June, conveying ambiguous signals.

In terms of supply: In May, the overall supply of copper was loose, and there was almost no interference at the mining end in the past two months. The production and port transportation issues of external mines were gradually solved, and copper concentrate continued to be marginal loose. The export channels of Congo copper mines have been restored, and Peru copper mines have resumed operation with a significant increase in production in March. In addition, LME registered warehouse receipts and inventory are still steadily increasing, which has a strong impact on copper prices.

In terms of demand: May has entered the off-season, and the operating rate of copper companies is generally lower than the same period last year. Cable companies have slowed down their new orders, and the performance of home appliances and power tool restocking is poor. Orders in the enameled wire industry have declined. Buying stocks on dips in the middle and lower reaches, with a fear of falling, only purchasing according to demand, without excessive inventory of raw materials and finished products.

Based on the above situation, in May, copper supply was sufficient, demand was weak, and the overall performance of copper was poor. Towards the end of the month, optimistic negotiations on the US debt ceiling boosted the stock market and eased concerns about a slowdown in the US economy. Market confidence was encouraged, and copper prices rebounded. However, LME copper inventory continues to grow, and demand remains weak, which poses a pressure on copper prices above. June is still the traditional off-season for consumption, and copper prices are expected to remain low and volatile in June.