Copper prices edged down on Fed dovish tone

LME copper prices opened at $8019/mt and closed at $8029/mt in overnight trading, a decline of 1.01%, with the low-end of $7967/mt and the high-end of $8060/mt. Trading volume was 18,000 lots, and open interest stood at 276,000 lots. The most active SHFE 2311 copper contract prices opened at 67200 yuan/mt and finished at 66730 yuan/mt last evening, down 0.25%, with the low-end of 66190 yuan/mt and the high-end of 66780 yuan/mt. Trading volume was 34,000 lots, and open interest stood at 158,000 lots.

On the macro front, Fed official Bostic: I don’t think we need to raise interest rates anymore, but if the outlook changes, we may need to raise interest rates further; Kashkari: If the economy is more resilient, we may have to raise interest rates further. In terms of fundamentals, the enthusiasm of downstream replenishment in East China increased, and spot premiums and discounts rebounded accordingly. The increase in inventory in South China began to slow down. Downstream companies in South China did not prepare much stock before the holidays and the enthusiasm for stockpiling after the holidays was strong. And as delivery is approaching, some sellers delivered warrants, resulting in limited spot resources. The overall premiums and discounts rose.

In terms of consumption, copper prices fell to new lows, which will boost demand, but the growth is expected to be limited. Copper prices will weaken due to unstable market sentiment.