Domestic Heavyweight Favorable Policies Are Expected to Significantly Boost Copper Prices [SMM Copper Morning Comment]

Last Friday, LME copper opened at $10,012.5/mt, initially declined to a low of $9,946/mt, then rose again to a high of $10,049.5/mt during the session, fluctuated downward at the end, and finally closed at $9,973.5/mt, a drop of 1.15%. Trading volume reached 24,000 lots, and open interest was 295,000 lots. Last Friday, the most-traded SHFE copper 2411 contract opened at 78,350 yuan/mt, initially rose to a high of 78,820 yuan/mt, then fluctuated downward, maintained wide fluctuations at the end, touching a low of 78,190 yuan/mt during the fluctuations, and finally closed at 78,280 yuan/mt, a drop of 0.41%. Trading volume was 53,000 lots, and open interest was 175,000 lots. Macro side, the US core PCE month-on-month rate for August slightly dropped back to 0.1%, below expectations, marking the lowest since May. After the data release, traders believed the likelihood of the US Fed cutting interest rates by 50 basis points in November was slightly higher than a 25 basis point cut. Meanwhile, another major policy was implemented domestically. On September 29, the People's Bank of China, together with the Financial Regulatory Administration, introduced four financial support policies for real estate, and the four major state-owned banks announced adjustments to existing personal housing loan rates, benefiting copper prices. Supply side, a large amount of imported copper is expected to arrive during the National Day holiday. Demand side, processing enterprises have mostly completed pre-holiday stocking, and with copper prices rising, new orders are significantly suppressed. Consumption weakens, which may lead to inventory accumulation after the holiday. In summary, the likelihood of a 50 basis point interest rate cut by the US Fed has increased, and domestic favorable real estate policies have been introduced again, which is expected to significantly drive copper prices.