Soaring energy prices intensify inflation concerns, stronger US dollar drags copper prices down [SMM Copper Morning Comment]

SMM, September 15: Overnight, LME copper opened at $14,085/mt, hit a high right at the open, then drifted lower throughout the session to a low of $13,958/mt, and finally settled at $14,024.5/mt, down 1.42%. Trading volume reached 27,000 lots, and open interest stood at 274,000 lots, down 1,215 lots from the previous trading day, reflecting long liquidation. Overnight, the most-traded SHFE copper 2610 contract opened at 106,900 yuan/mt, hit an intraday high of 107,020 yuan/mt, then drifted lower to a low of 106,650 yuan/mt, and finally settled at 106,920 yuan/mt, down 3.29%. Trading volume reached 50,000 lots, and open interest stood at 185,000 lots, down 3,283 lots from the previous trading day, also reflecting long liquidation. On the macro front, with the US Fed policy meeting approaching, escalating geopolitical conflicts have pushed energy prices higher, reigniting inflation concerns. Risk-off sentiment combined with expectations of rising interest rates drove the US dollar stronger, weighing on copper prices. Fundamentals side, supply remained tight overall as domestic copper and imported cargoes arrived in small volumes, with limited available supply in the market. Demand side, the traditional peak season combined with downstream dip-buying led to some recovery in demand, though overall buying remained largely need-based. As of Monday, September 14, SMM copper inventories across major Chinese regions rose 5,200 mt WoW to 90,300 mt, down 63,900 mt from 154,200 mt in the same period last year. Overall, copper prices are expected to drift lower today.