US Dollar Index Rebound Restrains Copper Price Rally, SHFE Copper Far-Month Contango Structure Widens [SMM Copper Futures Brief Review]

SMM, January 8:

Affected by the volatility in expectations surrounding the Trump administration's policies, the US dollar index recently dipped before rebounding, climbing back above the 108-point level during the day. Labour market data indicated a slowdown in employment, but US Fed Governor Bowman emphasized a cautious path for interest rate cuts in his speech. During the day, LME copper hovered around $9,000/mt before surging sharply after the Asian trading session to test $9,051/mt.

The SHFE copper 2502 contract also dipped before rebounding during the day, briefly testing 74,260 yuan/mt before recovering to around 74,500 yuan/mt. It closed at 74,480 yuan/mt, up 60 yuan/mt or 0.08%, with a trading volume of 44,922 lots and open interest of 140,801 lots, down 4,930 lots on the day. The SHFE copper 2503 contract recorded a trading volume of 24,969 lots and open interest of 125,981 lots, up 2,809 lots on the day. The price spread between the SHFE copper 2502 and 2503 contracts fluctuated between contango 100 yuan/mt and contango 60 yuan/mt during the day.

The rally in copper futures paused during the day, as the short-term strength of the US dollar continued to pressure copper prices. However, initial signs of tightness in fundamentals have emerged, with domestic copper cathode social inventory remaining at low levels. Tonight, attention will focus on US ADP employment data. If employment figures continue to show an improving trend, resistance for copper futures is expected to persist. Tonight, LME copper will test support at $9,000/mt, while SHFE copper will test support at 74,200 yuan/mt.
 

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