US Dollar Index Hovered at High Levels, Copper Prices Under Pressure Overnight [SMM Copper Morning Comment Dec 24]

Overnight, LME copper opened at $8,973.5/mt, briefly hitting a high of $8,982.5/mt at the beginning of the session before fluctuating downward throughout the trading hours. Near the session's end, it touched a low of $8,900/mt and then slightly rebounded to close at $8,936.5/mt, down 0.08%. Trading volume reached 10,000 lots, and open interest stood at 262,000 lots. Overnight, the most-traded SHFE copper 2501 contract opened at 73,980 yuan/mt, briefly hitting a high of 74,100 yuan/mt at the beginning of the session before fluctuating downward throughout the trading hours. Near the session's end, it touched a low of 73,730 yuan/mt and finally closed at 73,820 yuan/mt, down 0.28%. Trading volume reached 16,000 lots, and open interest stood at 102,000 lots. Macro side, the US Fed's expected pace of interest rate cuts is more cautious than market expectations, driving up the US dollar and US Treasury yields. The US dollar index continued to hover near a two-year high, while major US stock indices closed higher on Monday. Analysts noted that the US dollar is unlikely to weaken until the market becomes more dovish than the Fed, which will exert some pressure on copper prices. Fundamentally, the spot market remained sluggish. Meanwhile, due to the approach of transactions involving cargoes with invoices dated next month and year-end capital recovery needs, the center of spot premiums continued to decline. According to the SMM survey, domestic inventories resumed building over the past weekend. As of Monday, December 23, copper inventories in major regions across China tracked by SMM increased by approximately 200 mt compared to last Thursday, reaching 99,400 mt. However, total inventories were 49,000 mt higher than the 50,400 mt recorded in the same period last year. In terms of prices, the market trend is currently influenced by global central bank meetings. Diverging expectations among investors regarding next year's interest rate cuts, coupled with the US dollar index hovering at high levels, are expected to keep copper prices under pressure today. During the day, attention will focus on the revised US November building permits month-on-month rate and the preliminary US November durable goods orders month-on-month rate.