A short-term analysis of the Yangtze River copper price indicates that copper prices may see a substantial increase today. This follows an overnight surge in London copper, which rose by 2.4%, driven by an unexpected agreement from Trump to extend a ceasefire with Iran, improving market risk sentiment, coupled with a decline in London Metal Exchange copper inventories. Concurrently, a global sulfuric acid shortage is putting pressure on copper producers worldwide. Domestically, consumption during the peak season remains reasonably stable.
In the copper futures market, London copper strengthened at high levels overnight and closed significantly higher. The latest closing price was $13,471 per metric ton, an increase of $316, or 2.40%. Trading volume rose by 6,948 lots to 22,332 lots, while open interest decreased by 4,026 lots to 275,319 lots. On the Shanghai Futures Exchange, copper opened higher and traded near the upper end of its range, with its center of gravity slightly elevated. The most active June 2606 contract closed at 103,900 yuan per ton, up 1,430 yuan, or 1.40%.
According to data from the London Metal Exchange (LME), copper inventories on April 22 stood at 395,575 metric tons, a decrease of 3,000 metric tons from the previous trading session, representing a drop of 0.75%.
The main Shanghai copper contract, 2606, opened higher in early trading today at 104,030 yuan per ton, an increase of 1,560 yuan.
Macroeconomic Situation: Intensifying Games and Policy Support Internationally, the US and Iran are engaged in a high-risk game of chicken. With peace talks stalling and mutual maritime blockades escalating, oil prices have resumed their upward trend. The near-month WTI crude oil futures have surpassed levels seen before the breakdown of negotiations. Although Trump stated an intention to indefinitely extend the ceasefire, suggesting a reluctance to restart armed conflict, the lack of a clear exit strategy means that maximum pressure tactics are dragging the global economy into a prolonged war of attrition. Affected by this, the US dollar index strengthened overnight, while US stock markets rose across the board, indicating intensified market volatility between bulls and bears.
Domestically, China's Ministry of Industry and Information Technology is implementing the decisions of the Central Committee, focusing on three key tasks: First, strengthening top-level design and accelerating the formulation of plans for the 15th Five-Year Plan period, including initiatives for intelligent connected new energy vehicles. Second, stabilizing industrial operations by implementing growth stabilization plans for sectors like machinery and automobiles, and promoting equipment upgrades and trade-in programs. Third, concentrating efforts on technological breakthroughs through actions aimed at high-quality development of key industrial chains. These measures have injected a boost of confidence into markets clouded by geopolitical tensions.
Fundamental Analysis: Supply Bottlenecks and Demand Resonance On the supply side, the sulfuric acid shortage has become a critical variable. Influenced by the Middle East situation, sulfuric acid supply is tightening, with prices hitting record highs. Customs data shows that China's sulfuric acid exports to Chile dropped to zero in March, exacerbating the raw material crisis in the world's largest copper-producing country. Combined with factors like force majeure and strikes, Chile's copper production is precarious. Global copper concentrate processing fees continue to trend lower, indicating that 'ore shortage' has become the norm.
On the demand side, a divergent pattern is evident: traditional sectors are subdued, while emerging sectors are strong. Downstream processing enterprises are primarily purchasing based on immediate needs due to high prices, leading to lukewarm spot market transactions. However, emerging areas are performing notably well. In solar power and grid infrastructure, data from the International Energy Agency shows a significant increase in global new photovoltaic power generation capacity last year, driving demand for copper used in cables and transformers. The 'new three' exports—electric vehicles, lithium-ion batteries, and solar cells—increased by 77.5%, 50.4%, and 30.5% year-on-year respectively in the first quarter. This, coupled with PCB capacity expansion and the construction of AI computing centers, provides substantial room for copper consumption growth.
Viewpoint Summary: The sulfuric acid shortage is intensifying global supply concerns for copper producers. Domestically, fundamentals continue to improve, with social inventories consistently declining, leading to positive industry expectations.
Trading Recommendation: Consider light long positions on dips, paying attention to market rhythm and risk control. Spot copper prices are expected to rise significantly today.
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