The Zhitong Finance App learned that Dongwu Securities published a research report saying that with the release of US employment data that fell short of expectations, market concerns about the economic recession have increased, suppressing the rise in copper prices. Copper prices at home and abroad fell one after another this week. It is expected that short-term copper prices will be affected by both recession expectations and interest rate cuts, maintaining a volatile trend. Also affected by US economic data, the price of aluminum in Lun was impacted and fell month-on-month, while domestic demand declined due to the resumption of electrolytic aluminum production in Sichuan and safety reviews, and Shanghai Aluminum followed the decline. Dongwu Securities believes that the Federal Reserve is currently reducing its tolerance for the weak labor market, and has sent a signal that the Fed is continuing to cut interest rates in the future.

Looking back at this week's market (September 2 to September 6), the non-ferrous sector fell 5.13% this week, lagging behind all Tier 1 industries. In terms of the secondary sector, the energy metals sector in Shenwan's secondary non-ferrous metals industry fell 3.35%, the new metal materials sector fell 3.82%, the precious metals sector fell 3.93%, the small metals sector fell 3.96%, and the industrial metals sector fell 6.38% during the week. In terms of industrial metals, the number of job vacancies and non-farm payrolls fell short of expectations, indicating that the US labor market is weakening. The market is worried about America's economic growth prospects. Industrial metals recorded a general decline this week. In terms of precious metals, weak data on the US labor market raised concerns about deflation. Gold prices at home and abroad closed back down. The world gold ETF still recorded a large net inflow in August, and I am optimistic about the subsequent trend of gold.

Weekly opinion:

Copper: The US labor market is weakening, and copper prices have pulled back sharply this week. As of September 6, Lun Copper closed at 8,954 US dollars/ton, down 3.22% from week to week; Shanghai Copper closed at 73,050 yuan/ton, down 1.58% from week to week. On the supply side, as of September 6, the average TC price of imported copper ore fell to 5.5 US dollars/ton this week. The supply on the copper mine side remained stable. The weekly domestic production of electrolytic copper was 0.214 million tons, a decrease of 3.62% over the previous month. On the demand side, demand in the East China market increased, and the southwest region remained stable. This week, fundamentals maintained a weak pattern of both supply and demand, and overseas inventories continued to drop slightly; at the macro level, with the release of US employment data that fell short of expectations, market concerns about the economic recession increased, suppressing the rise in copper prices. Copper prices at home and abroad fell one after another this week. It is expected that short-term copper prices will be affected by both recession expectations and interest rate cuts, maintaining a volatile trend.

Aluminum: The slight resumption of production in Sichuan was compounded by maintenance by downstream aluminum companies, and the price of electrolytic aluminum fell month-on-month. As of September 6, LME Aluminum closed 2,342 yuan/ton this week, down 4.27% from last week; Shanghai Aluminum closed 19,310 yuan/ton, up 2.19% from last week. On the supply side, an electrolytic aluminum factory in Sichuan resumed production this week. This part of the production capacity was shut down in 2022. Currently, China's electrolytic aluminum industry has an operating capacity of 43.476 million tons, an increase of 0.05 million tons over the previous week; on the demand side, due to insufficient orders and large-scale safety inspections, etc., the operating rate of aluminum plate companies decreased by 0.21% month-on-month, and the operating rate of aluminum bar companies decreased by 48% month-on-month. This week, due to unanticipated US economic data, the price of Lunan aluminum was impacted and fell month-on-month, while domestic demand declined due to the resumption of electrolytic aluminum production in Sichuan and safety reviews, and Shanghai Aluminum followed the decline. Dongwu Securities believes that the supply side of electrolytic aluminum in China has now reached the theoretical peak level during the year; on the demand side, with the arrival of the peak consumption season, it is expected to further boost demand for electrolytic aluminum, and it is optimistic that aluminum prices will rise from a volatile upward trend.

Gold: Weak data on the US labor market raised concerns about deflation, and gold prices at home and abroad closed down and pulled back. As of September 6, the closing price of COMEX gold was 2526.80 US dollars/ounce, down 1.09% from week to week; SHFE gold closed at 573.68 yuan/gram, down 0.07% from week to week. This week, the US recorded 7.673 million JoLTS job vacancies in July, less than the expected 8.1 million; the US recorded 0.099 million ADP employment changes in August, lower than the expected 0.145 million; the number of jobless claims in the US recorded 0.227 million, lower than the expected 0.23 million in the week ending August 31; the US non-farm payrolls recorded 0.142 million people after seasonal adjustment, lower than the forecast Expected 0.16 million people; the US unemployment rate recorded 4.2% in August, in line with expectations.

Although the US agricultural data for August recorded a month-on-month increase, it was still lower than Bloomberg's constant expectations, and the market's expectations for the US economic recession have not subsided; furthermore, the number of job vacancies and the number of ADP employees falling short of expectations also indicates that the US labor market is weakening. This made the market worried about America's economic growth prospects. Gold prices generally fell during the week due to concerns about economic deflation. On Friday, Federal Reserve Governor Waller once again reiterated the need for “forward interest rate cuts” in his last public speech before the September meeting. Dongwu Securities believes that the Federal Reserve is currently reducing its tolerance for the weak labor market and has released a signal of continuity in subsequent Fed interest rate cuts. At the capital level, global gold ETFs achieved a net inflow of 28.5 tons in August, maintaining a rapid inflow. It is expected that gold prices will move further out of the upward trend.

Risk warning: The US dollar continues to strengthen; downstream demand falls short of expectations.