Market Risk Appetite Weakened, the Most-Traded BC Copper Contract Closed Down 0.84% [SMM BC Copper Commentary]

Today, the most-traded BC copper 2605 contract opened at 85,360 yuan/mt. After the opening, its center moved higher to a high of 85,910 yuan/mt, then fell to a low of 84,530 yuan/mt, and finally closed at 84,820 yuan/mt, down 0.84%. Open interest reached 6,442 lots, up 237 lots from the previous trading day, while trading volume reached 4,508 lots, up 219 lots from the previous trading day. On the macro front, market sentiment was affected by Trump's remarks on the US-Iran issue, with risk appetite weakening and expectations for a swift end to the Middle East conflict cooling, which was bearish for copper prices. Fundamentals, on the supply side, imported cargoes have continued to arrive recently, and overall spot circulation remained relatively ample. On the demand side, downstream enterprises still showed limited acceptance of current price levels, with just-in-time procurement remaining the main approach overall. Inventory, as of Thursday, April 2, SMM copper inventories in major regions across China fell 14.04% WoW from last Thursday, while total inventory increased 53,800 mt YoY and has posted destocking for three consecutive weeks.

The SHFE copper 2605 contract closed at 95,880 yuan/mt. Based on the BC copper 2605 contract price of 84,820 yuan/mt, its after-tax price was 95,847 yuan/mt. The price spread between the SHFE copper 2605 contract and BC copper was 33 yuan/mt, showing a contango structure.