SHANGHAI, Mar 7 (SMM) - LME copper closed with a gain of 0.3% at $8,950/mt in overnight trading. Trading volume was 15,000 lots and open interest stood at 250,000 lots. The most active SHFE 2304 copper contract finished at 69,630 yuan/mt last night, up 0.16%. Trading volume was 26,000 lots, and open interest stood at 146,000 lots.
On the macro front, due to a lack of short-term policy for guidance, the market is still waiting for the testimony of Fed Chairman Powell and job data to be released later this week to gauge the size of the US interest rate hike. In terms of fundamentals, as of this Monday March 6, copper stocks in Chinese markets tracked by SMM dropped 1,000 mt from last Friday to 308,100 mt. The current total inventory was 111,500 mt higher than the 196,600 mt before the Chinese New Year holidays.
Specifically, the inventory destocking in east China is mainly due to the low arrivals of both imported and domestic copper when the demand gradually picked up, thus the supply was insufficient to meet the demand. The inventory in Guangdong added with the increased arrivals of domestic copper.
At the same time, it is expected that consumption will continue to recover slowly as the peak season kicks off in March. But both macro factors and fundamentals have been weak recently, so copper prices are estimated to rise slightly against the slow recovery of consumption.
