SMM copper market morning comment (Feb 23): copper prices stayed high amid positive macro sentiment  

LME copper opened at $8551.5/mt overnight, with its session low and high at $8540/mt and $8608.5/mt before closing up 0.73% at $8608/mt. Trading volume was 22,000 lots, and open interest was 294,000 lots. SHFE 2404 copper contract opened at 69260 yuan/mt overnight, with its session low and high at 69100 yuan/mt and 69520 yuan/mt before closing up 0.25% at 69410 yuan/mt. Trading volume was 28,000 lots, and open interest was 155,000 lots. On the macro front, several officials from the Federal Reserve gave speeches, increasing market expectations for a delay in cutting interest rates. In addition, the number of Americans filing for unemployment benefits and PMI data both showed that the U.S. economy is highly resilient. The situation in the Red Sea remains tense, coupled with the expansion of US sanctions against Russia, the market sentiment is relatively tense. In terms of fundamentals, from the supply side, the demand for deliverable goods in the market has increased. However, due to the release of warehouse receipts and the flow of imported copper into the domestic market, copper supply is still relatively abundant. However, according to SMM, due to the low spot premiums or big spot discounts, the willingness of cargo holders to sell is not high. In terms of consumption, processing companies have gradually resumed work and begun to replenish stocks. However, rising market prices have inhibited some downstream purchasing enthusiasm. Therefore, the overall market transaction is still weak. It is expected that more demand will be released after the Lantern Festival. As of February 22, copper stocks in mainstream areas of China increased by 700 mt from Monday to 286,400 mt, but 39,000 mt below a year ago. Domestic demand has gradually recovered, macroeconomic sentiment remains optimistic, and copper prices remain high.