Understanding the Market | The Non-ferrous Sector Declines Collectively, Geopolitical Conflicts Amplify Non-ferrous Volatility, Grasberg Resumption Pressures Copper Prices
The non-ferrous sector collectively declined, with stocks such as Ganfeng Lithium and CHALCO falling. Market volatility has increased due to the Federal Reserve's interest rate meeting and geopolitical conflicts. The expectation of resuming production at the Grasberg mine in Indonesia is expected to exert medium-term pressure on copper prices, with short-term copper prices anticipated to fluctuate within a range
According to Zhitong Finance APP, the non-ferrous sector collectively declined. As of the time of publication, Ganfeng Lithium (01772) fell by 4.79% to HKD 36.54; CHALCO (02600) dropped by 3.84% to HKD 8.01; Jiangxi Copper (00358) decreased by 3.65% to HKD 33.82; and Luoyang Molybdenum (03993) fell by 3.33% to HKD 16.28.
On the news front, the Federal Reserve is about to begin a two-day interest rate meeting in July, and the conflict between the U.S. and Iran still faces the choice of escalation or de-escalation. Dongfang Securities stated that under the backdrop of geopolitical conflicts, non-ferrous volatility may significantly amplify. The Federal Reserve's July meeting may provide clearer guidance on monetary policy, but considering that the decline in precious metals has been relatively sufficient, the actual decline in precious metals may also be limited before the Federal Reserve clearly announces its interest rate decision.
In addition, the Grasberg mine in Indonesia is resuming production and is expected to be close to full capacity by the end of 2027. China International Capital Corporation released a research report stating that the resumption of Grasberg is a medium-term supply pressure, and marginal increments will continue to be released over the next 18 months, weakening the narrative of supply shortages and exerting temporary pressure on copper prices. Furthermore, the winter disturbances in Chile are seasonal regular events, the Caserones mine is limited in scale and the main northern mining area has not been affected, which is more about short-term emotional support rather than structural shocks. Overall, it is judged that short-term copper prices will fluctuate within a range under disturbance support, while medium-term upward space is constrained by the incremental pressure from Grasberg
