The decline in copper prices may not have bottomed out yet. Copper prices have been falling since June. At the beginning of July, LME copper price fell below $8,000 per ton, which was +0 for the first time since February 20265438. In the domestic futures market, as of last Friday (July 1), the main contract of Shanghai copper futures closed at 6 1460 yuan/ton, and Shanghai copper fell by 10% in the past month. Looking back at the first half of the year, the trend of copper price first rose and then fell, reaching 9800 USD/ton at the beginning of the year, and this round of decline began at the end of April. By the end of June, copper prices had plummeted by more than 20% in three months, giving back all the gains in the first half of the year. In the second half of the year, inflation and tightening of monetary policy remain the biggest macro themes in the global market. Guoyuan Futures said that the Fed's interest rate hike will determine overseas market sentiment. In the domestic market, with the acceleration of resumption of work and production, market confidence continues to improve. Fundamentally, the loose supply of mines remains unchanged, and the supply pressure of scrap copper has also eased. However, under the background that the overseas economy may fall into stagflation, the support of supply for copper prices will gradually weaken. Copper prices fell and the commodity bull market ended. Due to the continuous decline of copper price, the current "copper-oil ratio" is around 80, and the last copper-oil ratio reached around 80, which was 20 14 and 10. The data shows that the ratio of copper to oil refers to the ratio of international copper price to oil price. As an important commodity in the world, the price trend of copper and crude oil shows obvious positive correlation in a long period of time. Historically, whenever the ratio of copper to oil goes down, it will warn of the risk of economic recession, just like the indicator of "the yield curve of US bonds is upside down". Jing Chuan, chief economist of futures at China Property University, told CBN: "Copper price reflects more the global economic situation, while crude oil price is easily disturbed by geopolitical situation and policies of oil-producing countries of the Organization of Petroleum Exporting Countries. This year's geopolitical conflict is an important reason for the sharp rise in crude oil prices, so the copper-oil ratio has fallen to a historical low. " Analysts said that since 1988, the ratio of copper to oil has successfully warned the recession risks of 1990, 200 1, 2008, 201and 20 19. In the five recession warnings since 1990, the American economy entered recession within 12 months before the breakthrough. "The current trend of copper-oil ratio reflects the differentiated operation of the global economy. On the one hand, the weakening of industrial demand leads to the weakening of copper prices; On the other hand, since the outbreak of the epidemic, the fiscal expansion of the US government's currency has caused the superposition of conflicts between Russia and Ukraine, pushing up energy prices, and it is inevitable that the copper-oil ratio will continue to fall. " Jingchuan believes. After the Federal Reserve raised interest rates in June, the Bank of England also announced that it would raise interest rates by 25BP and the Swiss National Bank by 50BP. The European Central Bank is planning to raise interest rates with new tools. The wave of global liquidity tightening has kept European and American stock markets under pressure. Concerns about the Fed's interest rate hike and global economic growth prospects have hit commodities hard. Statistics show that since June, the main contract prices of Luntong, Lunni and Lunxi futures have fallen by 12.7%, 20% and 23% respectively. In the same period, the main contract price of Brent crude oil futures fell by 8.33%. Gu Fengda, head of Guo Xin Futures Research and Consulting Department, said that since June, overseas markets have been in a wave of interest rate hikes, and the market's pricing of economic recession has been clearly reflected in capital transfer and risk preference switching. In Gu Fengda's view, although commodities such as non-ferrous metals are supported by supply and demand fundamentals, it is expected that overseas monetary policy and market liquidity will tighten faster in the second half of the year, and the risk of "grey rhinoceros" of economic stagflation or even partial recession will increase. The pressure on all kinds of risky assets under overseas systemic risks should not be underestimated. The copper market may turn into surplus in the second half of the year. Copper is widely used in many industries, including household appliances, real estate, infrastructure, transportation and other fields. The further decline of copper price can alleviate the cost pressure of terminal enterprises in the industrial chain to some extent. According to the monitoring of Guoyuan Futures, since the copper price fell in April, the production and sales of downstream enterprises began to pick up. Generally speaking, with the recovery of logistics, the recovery of production and sales of downstream enterprises has promoted the purchase of refined copper. Futures analysis shows that consumption abroad is relatively strong in the first half of the year. However, in the context of geopolitical conflicts and the continuous tightening of monetary policies in Europe and the United States, it is expected that overseas copper consumption will slow down significantly in the second half of the year. Domestically, in the first quarter, benefiting from external demand preference, power investment grew steadily, and copper consumption was relatively good. However, the epidemic from March to May had a great negative impact on the terminal demand. With the continuous promotion and landing of the domestic steady growth policy in the second half of the year, copper consumption may be boosted. However, with the long-term decline of real estate and the weakening of external demand, there is limited room for further improvement of copper consumption. The agency predicts that global copper consumption will increase by 0. 1% and decrease by 0.2% in the third and fourth quarters respectively, increase by 0.8% in 2022, and is expected to rise to 1.5% in 2023. In terms of supply and demand balance, the global copper market was short of 380,000 tons in 20021year. It is estimated that it will turn into a surplus in the second half of 2022, with an annual surplus of 6,543,800 tons and a surplus of 530,000 tons in 2023. Specific to the sub-industry, Guoyuan Futures analysis shows that the demand for power supply projects in the current cable demand sub-industry is relatively good, but the performance is still not as good as in previous years. In terms of real estate, the raw material inventory of the upstream electric copper rod enterprises is at a low level, and the continuous recovery of domestic logistics will help the electric copper rod enterprises to replenish their supply, which will directly promote the consumption of refined copper in May. In terms of air-conditioning production, the overall performance was stable in the second quarter of this year, while the air-conditioning industry entered the traditional off-season in the second half of this year, and the production and sales ends will shrink significantly. In addition, the domestic automobile production and sales fluctuated weakly in the first half of the year, and the global chip shortage continued to affect automobile production. In order to stimulate the consumption of automobile industry, the activity of automobile going to the countryside has been started. Considering that there is little pressure on domestic automobile inventory, activities in the countryside are expected to drive the production and sales of the automobile industry to pick up. It is estimated that automobile production and sales will be the largest demand for copper in the second half of the year.