Macro Overall Bearish, Copper Prices Lack Significant Upward Momentum [SMM Morning Comment on Copper]

SMM, December 27: LME copper was closed overnight. The most-traded SHFE copper 2502 contract opened at 74,580 yuan/mt overnight, briefly hitting a high of 74,690 yuan/mt at the beginning of the session before fluctuating downward to an intraday low of 74,380 yuan/mt. It then fluctuated rangebound and consolidated sideways at the end of the session, finally closing at 74,430 yuan/mt, up 0.36%. Trading volume reached 19,000 lots, and open interest stood at 143,000 lots. Macro side, data released on Thursday showed that the number of Americans filing new claims for unemployment benefits last week fell to the lowest level in a month, consistent with a cooling yet still healthy US labour market. Additionally, post-Christmas holiday trading was sluggish, and the US dollar index edged down but remained at high levels, mainly due to market expectations that the US dollar will be bolstered by Trump administration policies next year, limiting the upward momentum of copper prices. Fundamentally, the earlier wide opening of the import arbitrage window led to lower costs for imported copper cathode, resulting in ample spot supply. However, year-end downstream demand remained weak, and overall transactions were sluggish. As of Thursday, December 26, SMM data showed that copper inventories in major regions across China increased by 6,000 mt from Monday to 105,400 mt, up 6,700 mt from last Thursday, marking a slight rebound after nine consecutive weeks of decline. Compared to Monday's inventory changes, most regions saw an increase in inventories, with only Guangdong and Jiangsu experiencing slight decreases. Total inventories were 39,000 mt higher than the 66,400 mt recorded YoY. Price side, with a bearish macro environment and lack of fundamental support, copper prices are expected to lack upward momentum today.