BC Copper Closed Higher in Volatile Trading as Bulls Added Positions, Hawkish US Fed Tone Cooled and Interest Rate Cut Expectations Rose [SMM BC Copper Commentary]

Overnight, BC was closed due to the Qingming Festival holiday. The most-traded BC copper contract 2605 opened at 85,390 yuan/mt during the day session, dipping to 85,200 yuan/mt at the start before the copper price center gradually shifted upward to 86,010 yuan/mt, then fluctuated downward to finally close at 85,580 yuan/mt, up 0.47%. Open interest stood at 6,450 lots, an increase of 46 lots from the previous trading day, and trading volume reached 2,046 lots, indicating bulls adding positions. On the macro front, Trump stated that Tuesday was the deadline for a US-Iran deal, while Iran refused to reach an interim ceasefire agreement. In addition, two US Fed officials warned of a severe inflation situation, hinting at tighter monetary policy, and market expectations for interest rate cuts continued to cool. On the fundamentals front, supply side, imported copper continued to arrive while domestic supply arrivals decreased, with overall supply relatively stable. Demand side, downstream buyers mainly made just-in-time procurement, and overall consumption slowed down slightly compared with the previous period.

The SHFE copper 2605 contract closed at 96,560 yuan/mt. Based on the BC copper 2604 contract at 85,580 yuan/mt, its after-tax price was 96,707 yuan/mt. The price spread between the SHFE copper 2604 contract and BC copper was -147, with the spread inverted and widening compared with the previous day.