The Fed's interest rate cut expectations and China's domestic destocking policy are expected to boost copper prices and affect transformer prices

The Fed expected to cut interest rates, the dollar fell to boost copper prices; Domestic demand is expected to be repaired, and domestic inventories are destocking to support copper prices. Please pay attention to the trend of the copper price, because the copper price affects the production cost of  power distribution transformers.

[Fundamentals] Overnight London copper closed at $9298.0 / ton on Friday, up 1.95%; Overnight Shanghai copper main 2410 contract closed at 74,240 yuan/ton, up 0.90%.

On the macro side, last week Federal Reserve Chairman Powell released a strong signal of interest rate cuts at the annual meeting in Jackson Hole, Powell made it clear that the Federal Reserve will consider cutting interest rates in September, and stressed that the time for policy adjustment has come. Copper is supported by a sharp fall in the dollar.

On the supply side, SMM data in July, China's electrolytic copper production was 1,028,200 tons, an increase of 23,200 tons from the previous month, an increase of 2.31%, a year on year increase of 11.05%. The cumulative output from January to July was 6.946,500 tons, an increase of 461,400 tons, 7.11% rises up than last year. The overhaul schedule increased slightly in August, and production is expected to decline month-on-month.

In terms of inventory, London copper inventory continued to accumulate last week, increasing by 6525 tons to 315,575 tons, 2.11% up from the previous week; Last week, Shanghai copper inventories continued to decline, a cumulative reduction of 11144 tons to 251,062 tons, 4.25% down from the previous week.

[Opinion and operation strategy] The Fed expected to cut interest rates, the dollar fell to boost copper prices; Domestic demand is expected to be repaired, and domestic inventories are destocking to support copper prices; Focus on domestic demand driven, intra-day low multi-order participation.

Because the copper price affects the production cost of  power distribution transformers, please pay attention to the trend of the copper price, look at the opportunity, place orders in time, and avoid bringing unnecessary cost burdens to you.