Copper prices went up as US core PCE hit new low

LME copper prices opened at $8035/mt and closed at $8091/mt in last Friday evening trading, a gain of 1.29%, with the low-end of $8028/mt and the high-end of $8122.5/mt. Trading volume was 20,000 lots, and open interest stood at 270,000 lots. The most active SHFE 2312 copper contract prices opened at 67120 yuan/mt and finished at 67210 yuan/mt last Friday evening, up 0.89%, with the low-end of 67100 yuan/mt and the high-end of 67120 yuan/mt. Trading volume was 40,000 lots, and open interest stood at 156,000 lots.

On the macro front, the U.S. core PCE price index recorded an annual rate of 3.7% in September, a new low since May 2021. The PCE indicator strengthens the case for the Fed to stay on hold. SMM data showed that as of Friday October 27, copper inventory across major Chinese markets stood at 68,000 mt, down 16,300 mt from last Monday and down 27,300 mt from two Fridays ago. Inventories hit the lowest for the year. In East China, due to the large number of domestically produced copper being directly shipped to downstream buyers and limited inflow of imported copper, inventories have declined significantly; inventories in South China have declined slightly, as the shipments of some goods from north China to Guangdong offset part of the increase in downstream demand. In terms of consumption, downstream companies still have sufficient orders, and demand is expected to still perform well. Copper prices are expected to remain relatively low in the near term.