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Supply is the main reason for weak copper prices
Views:  Date:2015-02-26 09:01:25

Goldman Sachs, the international investment bank, said in a recent research report that the fundamentals are a major factor in weaker copper prices, including weaker demand, faster-than-trend growth in refined copper supplies, Cost reduction and so on.


Goldman Sachs view, the copper price weakness is a fundamental factor, a key evidence is that the world's largest copper producer Chile's refined copper inventories continue to increase. Goldman Sachs estimates that Chile's copper inventories in the second half of 2014 increased by as much as 17 million tons, in addition to a brief period in 2013, which is more than 10 years, Chilean refined copper stocks reached the highest level.


The bank said that if the rest of the world's inventories are also included in the annual copper production than the excess demand of about 500,000 tons. This is equivalent to about 2% of annual production of refined copper.


Yesterday, the Shanghai copper main contract 1504 to 42160 yuan slightly higher open, followed by a narrow range to maintain the trend, closed down 0.07% to 41,900 yuan. Lunar New Year holidays in the domestic during the Lun copper shock consolidation, the trend is more gentle, the market trading is quite light.


On the spot market, copper spot price in Shanghai was RMB180 / t to reach RMB100 / t, and the transaction price of flat copper was RMB 41970 / t -42070 / t, and premium copper was RMB 42,000 / t -42130 / Ton. The first trading day after the Lunar New Year, the majority of enterprises have not yet fully return to the market, the downstream business is still in the holiday state, logistics and transportation have not yet begun, now the full line of copper to shipping, copper prices are larger, supply and demand were more light .

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