SMM, November 11: Overnight, LME copper closed down 1.27%, driven by long liquidation; SHFE copper closed down 1.29%, driven by short additions. On the macro front, US CPI data came in above expectations, pressuring copper prices. Copper prices are expected to consolidate on a subdued note in a narrow range today.
1. Overnight Futures
LME copper: Opened at $13,860/mt, hit a high of $13,863.5/mt, a low of $13,660/mt, and closed at $13,712/mt, down 1.27%. Trading volume was 19,000 lots, and open interest was 248,000 lots, down 664 lots from the previous trading day, reflecting long liquidation.
Most-traded SHFE copper 2612 contract: Opened at 105,200 yuan/mt, hit a high of 105,250 yuan/mt, a low of 104,500 yuan/mt, and closed at 104,510 yuan/mt, down 1.29%. Trading volume was 43,000 lots, and open interest was 192,000 lots, up 75 lots from the previous trading day, reflecting short additions.
2. Macro Front
US October CPI data came in above expectations, and US Fed officials continued to send hawkish signals, strengthening market expectations for a 25bp or even 50bp rate hike by the US Fed in December, exerting bearish pressure on copper prices. Meanwhile, geopolitical risks continued to ease, as Qatar's prime minister said at least two weeks had been secured for US-Iran negotiations to delay a US military strike on Iran.
3. Fundamentals
Supply side: Imported cargoes have been arriving steadily, and with some suppliers showing increased willingness to sell, the tight supply situation is easing at the margin.
Demand side: High premiums and wide price spreads between futures contracts continued to weigh on downstream purchase willingness, with weak demand showing no significant improvement.
