Copper prices under pressure amid weak consumption and high US dollar [SMM Copper Morning Comment]

LME copper prices opened at $8462.5/mt and closed at $8329/mt overnight, down 1.28%, with the highest of $8483/mt and the lowest of $8324/mt. Trading volume was 26,000 lots, and open interest stood at 278,000 lots. The most active SHFE 2402 copper contract prices opened at 67980 yuan/mt and closed at 67930 yuan/mt last evening, down 0.35%, with the high-end of 68180 yuan/mt and the low-end of 67860 yuan/mt. Trading volumes stood at 23,000 lots and open interest stood at 123,000 lots. On the macro front, the NFIB Small Business Confidence Index in the United States recorded 91.9 in December, a new high since July 2023. The market expects that the Federal Reserve will cut interest rates as soon as possible when the economy is already weak. The U.S. dollar index ran at a high level and this exerted some pressure on copper prices. In terms of fundamentals, after the downstream replenishment at low prices, as the price spread between front-month and next-month contracts increases, the overall demand was weak near the end of the year. The supply side is expected to remain ample. In terms of consumption, if copper prices do not fall significantly, consumption is expected to remain weak, and premiums are expected to continue to fall. The copper prices will meet resistance as the US dollar index rose.