US dollar index pullback supports copper prices; overnight LME copper closed up 0.62% [SMM Copper Morning Comment]

SMM News, September 8: Overnight, LME copper opened at $14,428/mt. Early in the session, the price center moved sideways and dipped to $14,415.5/mt, then rose all the way to a high of $14,533/mt, and finally closed at $14,494/mt, up 0.8%. Trading volume reached 15,000 lots, and open interest reached 266,000 lots, an increase of 242 lots from the previous trading day, indicating bulls added positions. Overnight, the most-traded SHFE copper 2610 contract opened at 109,540 yuan/mt. Early in the session, it bottomed at 109,320 yuan/mt, then the price center rose all the way to a high of 110,240 yuan/mt, and finally closed at 109,890 yuan/mt, up 0.62%. Trading volume reached 41,700 lots, and open interest reached 223,000 lots, an increase of 8,468 lots from the previous trading day, indicating bulls added positions. On the macro front, the US dollar index pulled back on the back of a stronger yen, providing bullish support for copper prices. Meanwhile, geopolitical risks resurfaced as Saudi Aramco’s oil facilities were attacked, lifting market uncertainty. On the fundamentals front, supply side, arrivals of imported and domestic cargo were relatively stable, and the overall tightness persisted; demand side, persistently high copper prices continued to suppress end-use consumption, with downstream purchases mainly driven by rigid demand. On inventories, as of Monday, September 7, SMM copper inventories in major regions nationwide fell 17,000 mt WoW to 85,100 mt. Total inventories decreased by 61,800 mt from 146,900 mt in the same period last year. Inventories continued to draw down, further reinforcing market concerns over tight supply in non-US regions and providing strong bullish support for copper prices. Overall, copper prices were expected to consolidate on a strong note today.