LME copper prices opened at $8069.5/mt and closed at $7964/mt in overnight trading, a drop of 0.46%, with the low-end of $7957/mt and the high-end of $8069.5/mt. Trading volume was 16,000 lots, and open interest stood at 270,000 lots. The most active SHFE 2311 copper contract prices opened at 66610 yuan/mt and finished at 66390 yuan/mt last evening, down 0.46%, with the low-end of 66310 yuan/mt and the high-end of 66750 yuan/mt. Trading volume was 26,000 lots, and open interest stood at 159,000 lots.
On the macro front, the CPI data released on Thursday unexpectedly rebounded, strengthening the market's expectations for the Federal Reserve to be "higher and longer" and to raise interest rates again this year. The U.S. dollar index rose, weighing on copper prices.
In terms of fundamentals, the spot market in East China was affected by the large supply of copper yesterday, and spot premiums and discounts fell. This was mainly due to the influx of imported copper that further hit spot premiums and discounts. However, the spot market premiums and discounts in South China rose all the way. This is mainly due to the narrowing of price spread between copper cathode and copper scrap which drove many downstream cable factories to use copper rods produced with copper cathode for production, resulting in many copper rod companies being at full production. Demand is not expected to increase significantly in the near future. In terms of price, suppressed by the strength of the US dollar, copper prices are expected to be difficult to recover in the near future.
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