Sou Hu Cai Jing·2025-11-27 23:59Core Viewpoint - Copper prices have declined by 3% since reaching a historical high of $11,200 per ton on October 29 due to concerns over global supply tightness, with a lack of new drivers contributing to the short-term price drop [1] Supply and Demand Analysis - Global visible copper inventory has increased to 780,000 tons, up by 47,000 tons month-on-month and 240,000 tons year-on-year, indicating that high copper prices have partially suppressed consumption [1] - Despite limited increases in copper mine output, the outlook for electricity consumption remains positive, leading to a widening global copper supply-demand gap over time, which supports a potential upward shift in copper prices [1] Market Dynamics - The copper market has already priced in supply disruptions from Grasberg and Teck, with weak consumption currently dominating the short-term price decline [1] - According to CME's "Fed Watch," there is a 71% probability that the Federal Reserve will cut interest rates by 25 basis points in December, which could help copper prices regain upward momentum if liquidity improves [1] - If interest rates remain unchanged, copper prices are likely to drop below 85,000 to around 83,000, presenting a good opportunity for accumulation [1] Valuation Metrics - For copper-related stocks, a copper price of 80,000 in 2025 corresponds to a price-to-earnings (PE) ratio of 15-16 times, while a price of 85,000 in 2026 corresponds to a PE ratio of 12-13 times [1] - It is recommended to actively engage in copper-related investments when the volatility of Shanghai copper decreases to low levels [1]