Tracking Hong Kong Stock Concepts | International Copper Prices Gradually Rising Institutions Optimistic about Interest Rate Cuts Driving Metals Resonance (with Concept Stocks)

After copper prices fell to a four-month low in early August, they have been steadily climbing in recent weeks. Ole Hansen, head of commodity strategy at Saxo Bank, stated that part of the recent increase in copper prices is due to the recovery in demand from hedge funds, which had previously reduced their exposure to base metals. Copper demand is widely considered as an indicator of the health of the economy. This metal is crucial for various sectors including the energy transition ecosystem, and is an essential material for manufacturing electric vehicles, power grids, and wind turbines. CITIC SEC pointed out that macroeconomic, supply and demand, and trading factors have been driving copper price fluctuations since 2024. Compared to the previous copper price cycle starting in March, all aspects of the current factors are more positive and clear in their potential impact on copper prices. First, with the slowing supply of concentrate and scrap copper coupled with a decline in TC, it is expected that the supply slowdown brought about by intensive maintenance at smelters in Q4 will eventually occur. Secondly, the high growth in demand in the energy transition sector and the structural improvement in grid demand are expected to drive the rebound in Q3 demand, and the seasonal replenishment of consumption in the peak season will further boost Q4 demand. Thirdly, with the Federal Reserve initiating a rate-cutting cycle, historical data confirms that the preventive rate cuts in the background of resilient US economy will help boost copper prices. Positive outlook on the resonance of commodity and financial attributes driving copper prices, maintaining the judgment that the operating range of copper prices in H2 of 2024 will be $9,000-$10,000 per ton, and maintaining the "outperforming the market" rating for the copper sector. Huayuan Securities released a research report stating that downstream copper production is picking up and inventories are continuously depleting. In the medium to long term, the issue of copper supply shortage has not been alleviated, and it will take a long time for capital spending to production, indicating that the supply rigidity remains and there is significant upside potential for copper prices in the medium to long term. Companies related to the copper mining sector: MMG (01208), Zijin Mining Group (02899), JIANGXI COPPER (00358), CMOC Group Limited (03993), CHINFMINING (01258), etc.