The Most-Traded BC Copper Contract Closed Up 1.68%, Easing Conflict Boosted Copper Prices [SMM BC Copper Commentary]

Today, the most-traded BC copper 2605 contract opened at 84,640 yuan/mt. In early trading, the center of copper prices bottomed at 84,620 yuan/mt, then rose to a high of 86,140 yuan/mt, and finally moved sideways to close at 86,020 yuan/mt, up 1.68%. Open interest stood at 6,205 lots, down 74 lots from the previous trading day, while trading volume reached 4,289 lots, up 991 lots from the previous trading day. On the macro front, the Iranian president said he was willing to end the war, provided that its demands were met and guarantees against further attacks were secured. The US defense secretary said the next few days would determine the direction of the conflict, and Trump planned to end the fighting within two to three weeks; meanwhile, the Iranian foreign minister said there had been no negotiations with the US, though information had been exchanged, and there had been no response yet to the "15-point plan." The current Middle East conflict has somewhat eased, crude oil prices plunged, inflation expectations cooled, and the US dollar index came under pressure and pulled back, all of which were bullish for copper prices. Fundamentals, supply side, imported cargoes have continued to arrive recently, and overall spot availability was relatively ample; demand side, affected by the rebound in copper prices, the market mainly maintained just-in-time procurement during the day.

The SHFE copper 2605 contract closed at 97,030 yuan/mt. Based on the BC copper 2605 contract price of 86,020 yuan/mt, its tax-inclusive price was 97,203 yuan/mt. The price spread between the SHFE copper 2605 contract and BC copper was -173 yuan/mt, with the inversion maintained and widening from the previous day.