Geopolitical Disruptions Sparked Market Caution, BC Copper Fluctuated and Closed Lower [SMM BC Copper Commentary]

Today, the most-traded BC copper contract 2605 opened at 91,080 yuan/mt, fluctuated upward to a high of 91,230 yuan/mt in early trading, then fluctuated downward. After the daytime session opened, the copper price center gradually shifted lower to 90,470 yuan/mt before maintaining wild swings, ultimately closing at 90,770 yuan/mt, down 0.5%. Open interest stood at 6,349 lots, a decrease of 185 lots from the previous trading day, and trading volume was 3,211 lots, indicating bulls reducing positions. Macro perspective, the prospects for a US-Iran ceasefire remained unclear, compounded by the renewed closure of the Strait of Hormuz, which heightened cautious sentiment in the market. Meanwhile, the market focused on the Senate confirmation hearing of Fed Chairman nominee Warsh. Fundamentals side, supply side, imported copper arrivals increased, while domestic supply was tight due to smelter maintenance. Suppliers cut prices for destocking, and cargoes flowed southward. Demand side, copper prices moved sideways, and downstream buyers only made just-in-time procurement.

SHFE copper 2606 contract closed at 102,140 yuan/mt. Based on the BC copper 2605 contract at 90,770 yuan/mt, its after-tax price was 102,570 yuan/mt. The price spread between SHFE copper 2606 contract and BC copper was -430, remaining inverted but narrowing compared to the previous day.