BC Copper Fluctuated Downward and Closed Lower as Geopolitical Disruptions Intertwined with Stronger US Dollar [SMM BC Copper Commentary]

Today, the most-traded BC copper contract 2605 opened at 91,330 yuan/mt, fluctuated upward to probe 91,860 yuan/mt in early trading, then the copper price center gradually shifted downward to touch 90,650 yuan/mt after the daytime session opened, followed by wild swings, and finally closed at 90,860 yuan/mt, down 0.65%. Open interest stood at 4,313 lots, down 1,377 lots from the previous trading day, with trading volume at 5,290 lots, indicating bulls reducing positions. Macro perspective, US-Iran negotiations reached a deadlock and regional confrontation intensified, with Middle East geopolitical disruptions continuing to escalate; meanwhile, the US dollar index strengthened, exerting notable downward pressure on copper prices. However, Iran's exemption of Strait of Hormuz transit fees for friendly nations such as Russia eased market risk-averse sentiment to some extent. Demand side, copper prices fluctuated at high levels, and downstream enterprises adopted a cautious purchasing stance, mainly restocking on rigid demand with weak stockpiling willingness. Inventory side, as of Thursday, April 23, SMM copper inventories in mainstream regions nationwide decreased by 4,300 mt WoW from Thursday to 258,900 mt, with total inventory up 77,200 mt compared to the same period last year at 181,700 mt.

SHFE copper 2606 contract closed at 102,460 yuan/mt. Based on the BC copper 2605 contract at 90,860 yuan/mt, its after-tax price was 102,671 yuan/mt, and the price spread between SHFE copper 2606 contract and BC copper was -211, with the inverted spread maintained and widened from the previous day.