SMM, February 6:
Yesterday, the US released January ADP employment data, which recorded 183,000, far exceeding market expectations. Although the January services PMI was below expectations, the overall economic data remained robust, supporting a slight strengthening of the US dollar index. In the international market, bulls were active. LME copper opened lower in the morning but quickly rebounded, climbing throughout the session to a peak of $9,350/mt. It closed higher during the Asian trading session, operating above the 5-day moving average.
The most-traded SHFE copper 2503 contract opened higher and moved upward today, consolidating above 75,000 yuan/mt in the morning session. Subsequently, driven by market buying, it continued to rise, reaching an intraday high of 76,560 yuan/mt and finally closing at 76,480 yuan/mt, up 1.55%. Open interest stood at 166,236 lots, with a daily increase of 10,803 lots. The price spread between the SHFE copper 2502 and 2503 contracts fluctuated between C110-C140 yuan/mt.
During the day, the price spread between the COMEX most-traded contract and the LME 0-3M contract further widened to nearly $600/mt, supporting the continued rise of LME copper. On the macro front, the market will continue to focus on US initial jobless claims data and the US Fed's subsequent policy moves in the short term. Tonight, LME copper is expected to consolidate within the range of $9,300–$9,350/mt, while SHFE copper is expected to fluctuate around 76,500 yuan/mt.
