On Thursday (December 1), commodities generally rebounded higher following the surge in crude oil overnight. The Shanghai Copper 1702 contract ended up 2.08% higher at 47,060 yuan/ton. During the European session, the LME three-month copper contract was trading around $5,830/ton, rising slightly by 0.60% during the day.
(Jiangxi New Materials Co., Ltd.)
LME three-month copper time-share chart
Shanghai Copper 1702 Contract Time Sharing Chart
After months of bickering, OPEC representatives finally reached an agreement on Wednesday to cut production for the first time in eight years. According to the agreement, OPEC will cut production by 1.2 million barrels per day from current levels starting in January 2017, equivalent to about 1% of global production. The organization’s new production target is 32.5 million barrels per day. This has driven up international oil prices and also contributed to the strength of commodities.
Rescue workers were working on Wednesday to search for six missing people after an earthquake near the Rudna copper mine in southwestern Poland killed two people. The mine is one of the largest copper mines in Europe and has been in operation since 1974. The operator is Polish Copper Group (KGHM).
Haitong BAnk analyst Andrew Keen said: “The fundamentals have not really changed, and the flow of speculative funds has reversed.”
“Copper inventories on exchanges are flat, and the market is facing a significant increase in refinery capacity, which may be negative for the market. People follow prices to interpret fundamentals, not the other way around.”
BMI Research also said in the report: “We expect the infrastructure investment plan to be disappointing, and we believe that the rally in the commodity market after the US presidential election has been excessive.”
In terms of spot prices, the current quotation of spot 1# electrolytic copper in Shanghai is 46670-46870 yuan/ton, an increase of 240 yuan/ton, and a discount of 100-flat water yuan/ton. The discounts offered by stockholders to spot copper prices have increased, and the discounts have continued to narrow slightly. Downstream market inquiries are active, but the actual purchase volume is not large. The market as a whole showed active trading at low prices.
Looking at the daily line, the Shanghai Copper 1702 contract has formed a partial shock upward channel, and copper prices are currently back near the middle track of the channel. In the 15-minute short-term cycle, the resistance at the 50% rebound dividing level of 48480 is effective, and copper prices form a sideways shock trend near here.
On the daily line, the 5-day moving average of LME three-month copper price failed to reach the high value. Copper prices turned downward and rebounded upward, and the MACD indicator showed signs of closing. On the 1-hour chart, a local upward trend line is formed below.
