SMM Morning Comment For Copper Market On January 23

SHANGHAI, January 23 (SMM) –
LME copper opened at $8376.5/mt overnight, with its session low and high at $8311/mt and $8381/mt before closing down 0.61% at $8329/mt. Trading volume was 14,000 lots, and open interest was 277,000 lots. SHFE 2403 copper contract opened at 67880 yuan/mt overnight, with its session low and high at 67720 yuan/mt and 67980 yuan/mt before closing dwn 0.12% at 67920 yuan/mt. Trading volume was 18,000 lots, and open interest was 147,000 lots. On the macro front, the Red Sea crisis continues to escalate, market risk aversion may intensify, and the U.S. index strengthens, suppressing copper prices. In terms of fundamentals, on the supply side, a lot of imported copper and low-priced supplies flowed into the spot market over the weekend. In terms of consumption, due to the impact of the futures market, downstream producers still restock as needed at low prices, the overall trading is not active, premiums have continued to fall, and it is expected that there is still room for downside. Overall, the supply is increasing. If futures price and premiums go down, downstream buyers will begin pre-holiday stocking. As of Jan 22, the copper inventory across China’s major trading markets increased by 5,400 mt from last Friday to 80,800 mt. Taken together, the U.S. dollar index is strong, coupled with the current lack of recovery in consumption and low market activity, copper prices are expected to be under pressure.