Copper: Dangerous edge aluminum: weak and hard to return
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Judging from the atmosphere of the entire commodity market, the fact that most commodities have weakened is an indisputable fact. After crude oil prices hit a new high last week, they fell sharply. However, it is not certain that crude oil prices have peaked. The decline in nickel prices and steel prices is still a warning to copper prices. Based on their relationship with the macro economy, we still consider it a leading indicator of base metals. It is only a matter of time. At present, the copper price is mainly due to inventory and labor disputes. Copper stocks continued to fall on the three major exchanges last week. LME stocks have fallen below 30,000 tons, and the dominant inventory totaled 71,393 tons. There has been rumors of LME stocks in the market. There will be a substantial increase. I believe that this is the same issue as squeezing out the warehouse. After the end of the squeezing, inventory should have increased. This is just a guess of time. The Zaldivar copper trade union in Chile said on Tuesday that they had suspended the contract negotiations with the operators. If the salary proposals have not improved, they will strike on Monday. According to Chile’s laws, both employers and employees can request the government to conduct at least five days of mediation. The Zaldivar copper mine is expected to produce 150,000 tons of cathode copper this year. The author believes that the copper market is close to the end of the squeeze, the new high copper prices may have been paralyzed, copper prices may fall sharply in the short term, relying on the former target position directly at the track around the edge of 3,000 US dollars. However, based on the macroeconomic performance is not bad, we are currently not too pessimistic about the copper price, strategic long-term short selling opportunities have not yet arrived. For the aluminum market, the aluminum inventory announced by the Aluminum Association in May last week showed that global aluminum inventories continued to rise. Especially in Asia, the United States and European aluminum premiums fell. Western suppliers agreed to cut the third quarter aluminum premium of about 8 US dollars. Japan Buyers and suppliers finalized the third quarter of aluminum premiums of 70 to 72 US dollars / ton. The performance of the international aluminum market remains weak. After the aluminum price of LME fell below 1,700 US dollars, it will point to 1,600 U.S. dollars. Although there is some potential supply support, we must observe the direction of the entire basic metal. Although China has continuously introduced measures to limit aluminum exports and production, due to China’s economic system, for most of the larger state-owned enterprises, these measures have a real effect and there is a time lag, which is not a great deal for the international market. And the oversupply of the domestic market cannot be changed either.