US CPI Data Was Lower than Expected; Copper Prices Rose Overnight [SMM Copper Morning Comment]

LME copper opened at $9,098/mt overnight. After a slight rise in early trading, it fell to an intraday low of $9,044/mt, and then climbed all the way up, peaking at $9,145/mt before closing at $9,138/mt, a 1.32% increase. The trading volume was 17,000 lots and open interest was 272,000 lots. The most-traded SHFE copper 2410 contract opened and peaked at 73,330 yuan/mt, then fell to an intraday low of 72,710 yuan/mt before climbing back up, and finally closed at 73,100 yuan/mt, a 0.51% increase. The trading volume was 35,000 lots and open interest was 154,000 lots. Macro-wise, the US August non-seasonally adjusted CPI year-on-year rate released last night was 2.5%, the fifth consecutive month of decline, hitting the lowest level since February 2021, below the market expectation of 2.6%. The non-seasonally adjusted core CPI year-on-year rate was 3.2%, flat with both expectations and the previous value, after four consecutive months of decline. Following the CPI data release, expectations for the US Fed to cut rates by a modest 25 basis points next week were strengthened, which is favorable for copper prices. Fundamentally, a large volume of imported copper was concentrated in domestic trade yesterday, increasing spot copper cathode supply. Traders actively sold, impacting the spot premiums and discounts. Consumption-wise, with the Mid-Autumn Festival approaching, downstream stockpiling sentiment has emerged, leading to a good overall consumption performance. Price-wise, the global market is closely monitoring the Fed's movements, and copper prices are expected to remain in a low-level fluctuation.