SMM Copper Morning Comment: Copper prices moved at highs last Friday evening as market awaiting central bank meetings

LME copper prices opened at $8548/mt and closed at $8529/mt last Friday evening, a drop of 0.22%, with the low-end of $8518/mt and the high-end of $8587/mt. Trading volume was 18,000 lots, and open interest stood at 280,000 lots. The most active SHFE 2403 copper contract prices opened at 68910 yuan/mt and finished at 69010 yuan/mt last Friday evening, up 0.01%, with the low-end of 68990 yuan/mt and the high-end of 69280 yuan/mt. Trading volume was 21,000 lots and open interest stood at 153,000 lots. On the macro front, previous U.S. data showed that inflation has slowed down, and the market is more confident that the Federal Reserve will cut interest rates as soon as possible. In addition, the domestic reduction of the deposit reserve ratio also has a boosting effect on the market. This week we need to pay attention to the policy meetings of European and American central banks and the US non-farm payrolls report in January. In terms of fundamentals, from the supply side, a large amount of imported goods have recently flowed into the domestic trade market, which will have an impact on premiums and discounts. In terms of consumption, towards the end of the month, a large number of companies will start to take holidays. With copper prices running at high levels, it is expected that downstream willingness to stock up will be low. According to SMM research, as of Friday January 26, copper inventories in mainstream regions across China increased by 4,400 mt from last Monday to 85,200 mt. Overall, it is expected that the oversupply will further deepen this week. Copper prices are expected to remain rangebound narrowly.