Copper Prices Close Higher Both Domestically and Abroad; Stockpiling and Destocking Support Futures [SMM Copper Morning Comment]

SMM, September 22: Overnight, LME copper opened at $14,683.5/mt. In early trading, copper prices moved straight up to a high of $14,774/mt, then drifted lower to $14,632.5/mt. Prices then consolidated in a narrow range and eventually settled at $14,664.5/mt, up 0.7%. Trading volume reached 21,700 lots, and open interest stood at 267,000 lots, up 2,264 lots from the previous trading day, driven by bullish positioning. Overnight, the most-traded SHFE copper 2610 contract gapped up to 111,380 yuan/mt at the open, then drifted lower to a low of 110,510 yuan/mt. It subsequently consolidated in a narrow range and settled at 110,709 yuan/mt, up 0.67%. Trading volume reached 31,600 lots, and open interest stood at 148,000 lots, up 340 lots from the previous trading day, also driven by bullish positioning. On the macro front, US Fed officials sent hawkish signals, saying rates would need to rise if inflation does not pull back. In the Middle East, Iran will sell a seized US vessel to pay compensation, an oil tanker was attacked in the Strait of Hormuz, the US plans to allocate $5 billion to rebuild Middle East energy facilities, the closure of a Libyan pipeline caused production to plunge, Iran's foreign minister arrived in New York, and the UK agreed to provide air-to-air refueling for Saudi Arabia. In China, Xi Jinping will visit the US from September 23 to 25. The pullback in crude oil eased inflation pressure, and with the holiday approaching and pre-holiday stockpiling expectations building, demand recovered modestly while inventories continued to decline, overall supportive for copper prices. Fundamentals side, available supply remained tight during the day, Shanghai inventories drew down sharply, and imported supply was limited, keeping the overall supply situation tight. Demand side, downstream pre-holiday stockpiling demand was released, purchasing sentiment rebounded notably, purchase willingness strengthened, and overall transactions performed well. Inventory side, as of Monday, September 21, SMM copper inventories in mainstream regions across China fell 14,500 mt WoW to 74,800 mt, down 65,300 mt from 140,100 mt in the same period last year. Overall, copper prices are expected to hold up well in a narrow range today.