Guotai Junan Futures: Macro disturbances, copper fundamentals are relatively strong

There is short-term uncertainty in US-Iran negotiations, and the Strait of Hormuz remains under blockade. Progress in US-Iran talks affects investor sentiment, thereby continuously disturbing prices. The fundamentals still have support, with supply-side disruptions increasingly intensifying. Due to the tension in sulfuric acid, African wet-process copper is expected to reduce production, and as the blockade of the Strait of Hormuz prolongs, this expectation will be further reinforced. Consumption has some bright spots; the US computing power centers remain important drivers of copper demand. In terms of inventories, domestic inventories continue to decline, while COMEX inventories are steadily increasing. However, we believe that market expectations of US tariffs are causing COMEX copper prices to be higher than LME copper prices. After large amounts of copper flow into the US, they will temporarily not flow out, which may lead to tight copper inventories outside the US. Overall, the copper price fundamentals still support prices, and we favor buying on dips after price corrections. (Guotai Junan Futures)