Copper Futures Prices Rebounded on Optimistic US Debt Ceiling Negotiations

LME copper closed at $8,308/mt in overnight trading. Trading volume was 21,000 lots and open interest stood at 256,000 lots. SHFE 2306 copper contract finished at 65,750 yuan/mt last evening, up 2.19%. Trading volume was 61,000 lots, and open interest stood at 164,000 lots.

On the macro front, the US dollar index rose on optimism over a deal to extend the debt ceiling and avoid a US default. Also boosting the dollar was a round of solid economic data suggesting the Fed's rate cuts may be delayed rather than brought forward.

In terms of fundamentals, the spot supply was tight as there had not been cargoes under warrants offered for sales after delivery. Downstream procurement has increased due to lower SHFE copper prices. Spot quotes thus rose. In addition, there will be additional inflows of imported copper due to import profits. Copper prices rebounded as shorts took profits. The guidance for copper prices from fundamentals are still weak.

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