SMM Copper Morning Comment: PCE pushed up copper prices overnight, more data guidance needed for interest rate cuts

LME copper prices opened at $8458.5/mt and closed at $8478.5/mt overnight, a rise of 0.28%, with the low-end of $8448.5/mt and the high-end of $8520/mt. Trading volume was 17,000 lots, and open interest stood at 290,000 lots. SHFE 2404 copper opened at 69140 yuan/mt overnight and rose to 69140 yuan/mt after falling to 68860 yuan/mt, closing at 69050 yuan/mt, up 0.38%. Trading volume was 18,000 lots, and open interest stood at 149,000 lots. On the macro front, the U.S. core PCE price index in January recorded an annual rate of 2.8% (expected 2.8%, previous value 2.9%), the smallest increase since March 2021, supporting copper prices. However, the PCE monthly rate data reached a new high, and recent data shows that the cost of goods and services has increased, which may push the inflation trend to accelerate again. It is necessary to continue to pay attention to February data to verify the inflation speed. In terms of fundamentals, from the supply side, supplemented by imported copper, it remains relatively sufficient. In terms of consumption, as long-term orders are about to be delivered in March and copper prices surged again, downstream consumption remained unchanged. Overall, the supply and demand situation changed little, and the market is waiting for consumption to recover in March. In terms of price, on the whole, PCE data has driven copper prices higher, and copper prices are expected to remain high.