SMM copper market morning comment (Mar 26)

LME copper prices opened at a low of $8,840/mt on Monday, reaching a low of $8,835.5/mt, and dropped to $8,840/mt after hitting a high of $8,933/mt, and finally closed at $8,863/mt. Trading volume was 16,000 lots, and open interest was 314,000 lots. Overnight, the most-traded SHFE 2405 copper contract opened 72,180 yuan/mt, hitting a low of 72,160 yuan/mt, and declined after a hiking to 72,520 yuan/mt, and finally closed at 72,340 yuan/mt. Trading volume was 38,000 lots and open interest was 196,000 lots.

On the macro front, Federal Reserve was still cautious about cutting interest rates, and the US dollar inched down, lifted copper prices. At the same time, according to foreign media, the OPEC+ may keep reducing crude oil output next week. In addition, it is reported that Russia also requires oil companies to complete production control by the end of June. Rising crude oil prices may offer some boost to copper prices. In terms of fundamentals, port arrivals of imported copper will lessen over the weekend. In terms of consumption, copper prices remained high, and rigid demand lingered. Moreover, facing financial constraints, some enterprises may cut their purchases at the end of Q1. Overall, as of March 25, SMM copper inventories in mainstream regions in China fell by 7,700 mt from March 21 to 387,300 mt. A focus will be put on copper import market this week. On the whole, positive macro sentiment and crude oil price hike may keep copper prices at high levels.