BC copper the most-traded contract closed up 1% Geopolitical risks boost copper prices [SMM BC Copper Commentary]

Today, the most-traded BC copper 2604 contract opened at 92,610 yuan/mt. It initially reached a high of 92,930 yuan/mt and then the center of gravity declined sharply, hitting bottom at 90,840 yuan/mt during the day. Subsequently, copper prices rose, closing at 92,390 yuan/mt with a 1% increase. Open interest stood at 5,531 lots, down by 33 lots from the previous trading day, while trading volume reached 10,172 lots, up by 3,188 lots from the previous day. On the macro front, the situation in the Middle East suddenly escalated, with the U.S. military launching strikes against Iran. The turbulent situation increased shipping risks in the Strait of Hormuz, coupled with rising oil prices, impacting global copper supply and logistics costs, which was bullish for copper prices. However, since Iran is not a major exporter of copper concentrates, the impact was more of a short-term sentiment disturbance and a slight increase in the cost side, rather than a fundamental reversal in supply and demand. Fundamentally, on the supply side, imports and domestic supplies continued to arrive, maintaining a loose supply. On the demand side, consumption recovered somewhat as downstream operations resumed, but the overall recovery was slow. In terms of inventory, as of March 2, SMM's domestic copper cathode inventory increased by 5.3% WoW.

The SHFE copper 2604 contract closed at 103,850 yuan/mt. If calculated based on the 92,390 yuan/mt price of the BC copper 2604 contract, the post-tax price would be 104,401 yuan/mt. The price spread between the SHFE copper 2604 contract and the BC copper 2604 contract was -549, with the inverted spread widening compared to the previous day.