Production Resumption of Smelters and Imported Copper Inflows Are Expected to Increase Total Copper Supply [SMM Copper Morning Comment Dec 3]

LME copper opened at $8,996/mt overnight, initially rising to a high of $9,025/mt. It then fluctuated widely, hitting a low of $8,955.5/mt during the session, and finally closed at $8,996.5/mt, down 0.21%. Trading volume reached 17,000 lots, and open interest was 268,000 lots. The most-traded SHFE copper 2501 contract opened at 73,810 yuan/mt overnight, initially hitting a low of 73,800 yuan/mt. It then fluctuated upward before the center shifted downward, reaching a high of 74,170 yuan/mt during the session, and finally closed at 74,060 yuan/mt, up 0.47%. Trading volume reached 29,000 lots, and open interest was 163,000 lots. Macro side, US Fed Governor Waller indicated a preference for an interest rate cut in December but remained open to pausing rate cuts. The US November ISM Manufacturing PMI recorded 48.4, the highest since June 2024. The rise in the US dollar pressured LME copper downward, but signs of recovery in domestic manufacturing led to mixed performance in LME and SHFE copper prices. Fundamentally, with smelter maintenance completed, domestic copper supply is expected to increase this week. Imported copper continued to arrive, and total supply is expected to increase compared to last week. Meanwhile, the operating rate of copper cathode rod producers is expected to decline this week, with consumption likely weakening after a high operating rate for three weeks. As of Monday, December 2, SMM copper inventories in major regions nationwide increased by 5,700 mt compared to last Thursday, reaching 143,200 mt. However, total inventory was 89,200 mt higher compared to 54,000 mt in the same period last year. Overall, copper prices are expected to fluctuate widely today.