BC Copper Closed Slightly Lower Intraday as Persistent Rate Hike Expectations Continued to Weigh on the Market [SMM BC Copper Commentary]

Today, the most-traded BC copper contract 2606 opened at 92,280 yuan/mt, touching a high of 92,320 yuan/mt at the beginning of the session. Copper prices then fluctuated downward in center, continuing to fluctuate downward after the day session opened to probe a low of 91,230 yuan/mt. Prices subsequently fluctuated upward, ultimately closing at 92,080 yuan/mt, down 0.54%. Open interest stood at 9,081 lots, a decrease of 44 lots from the previous trading day, with trading volume at 6,552 lots, indicating bulls reducing positions. On the macro perspective, uncertainty lingered over the direction of US-Iran negotiations, with geopolitical friction risks escalating. Meanwhile, the market bet on a hawkish shift in US Fed monetary policy, with the probability of a rate hike within the year rising to 75%, and rate hike expectations continuing to pressure copper prices. On the fundamentals, supply side, domestic smelters were undergoing concentrated maintenance, with fewer copper cathode arrivals in the market, tight circulation of high-quality copper sources, and overall tight spot supply. Demand side, although copper prices saw a slight correction, downstream wait-and-see sentiment remained strong, with only just-in-time procurement maintained and overall demand remaining weak.

SHFE copper 2606 contract closed at 103,950 yuan/mt. Based on the BC copper 2606 contract at 92,080 yuan/mt, its after-tax price was 104,050 yuan/mt. The price spread between SHFE copper 2606 contract and BC copper was -100, maintaining an inversion but narrowing compared to the previous day.