SMM copper morning comments

LME copper prices opened at $8099.5/mt and closed at $8111/mt in overnight trading, a gain of 0.82%, with the low-end of $8075.5/mt and the high-end of $8126.5/mt. Trading volume was 23,000 lots, and open interest stood at 274,000 lots. The most active SHFE 2311 copper contract prices opened at 67200 yuan/mt and closed at 67110 yuan/mt last evening, up 0.34%, with the high-end of 67280 yuan/mt and the low-end of 67030 yuan/mt. Trading volumes stood at 30000 lots and open interest stood at 153,000 lots.

On the macro front, the Fed Vice Chairman Jefferson said that they will pay attention to the tightening effect brought about by rising yields, and the Fed can "act cautiously" with a better balance of risks. In addition, some officials said that although the labor market is still tight, some important factors indicate that supply and demand are reaching a better balance.

On Fundamentals, As of Monday October 9, SMM copper inventories across major Chinese markets stood at 114,300 mt, up 20,700 mt from last Saturday and 41,200 mt higher from the pre-holiday. The concentrated arrivals of imported copper and domestic copper in East China has caused a significant increase in inventory; in South China, mainly due to poor downstream consumption, inventory consumption was modest, which has also continued to increase inventory. In terms of consumption, some downstream companies were restocking after the holidays, but the demand was not strong. Copper prices are expected to remain rangebound at low levels as the market is awaiting US economic data.