SMM Copper Morning Comment

LME copper prices opened at $8540/mt overnight before reaching a low of $8511/mt and a high of $8588/mt, and closed at $8531/mt, a rise of 2.3%. Trading volumes were 31,000 lots and open interest stood at 286,000 lots. The most active SHFE 2401 copper contract prices opened at 68800 yuan/mt and finished at 68670 yuan/mt last evening, up 0.94%, with the low-end of 68580 yuan/mt and the high-end of 68870 yuan/mt. Trading volume was 36,000 lots open interest stood at 148,000 lots. On the macro front, as the European and British central banks countered market expectations of interest rate cuts, in sharp contrast to the Fed's attitude, the euro rose against the U.S. dollar and the pound against the U.S. dollar both rose by more than 1%, and the U.S. index closed lower. In terms of fundamentals, the price spread between front-month and next-month contracts widened again near delivery. Yesterday, cargo holders in East China and South China both lowered prices for shipments, but there was no willingness from the downstream to buy the goods, and the overall market transaction was poor. Many downstream companies want to wait until the the delivery of the SHFE front-month contract before making purchases, and are worried about whether the insufficient supply of goods will push spot premiums and discounts higher. According to SMM, imported copper will arrive in the second half of next week, which will have a certain impact on the spot price premium and discount of copper in the domestic trade market. In terms of consumption, it is expected that market demand will continue to be poor before the delivery of the SHFE front-month contract, and replenishment will mainly be for rigid needs. It is expected that copper prices will run strongly in the near future.