US Dollar Index Hovered at High Levels, While the Most-Traded BC Copper Contract Fluctuated Rangebound [SMM BC Copper Commentary]

SMM, December 27: Today, the most-traded BC copper 2502 futures contract opened at 65,960 yuan/mt and closed with a bearish candlestick, with the upper shadow piercing through the 20-day moving average. Overnight, the most-traded BC copper 02 contract opened higher with a gap, driven by increased long positions, and peaked at 66,150 yuan/mt. Subsequently, a tug-of-war between longs and shorts tested the 66,000 yuan/mt level. During the morning trading session, the futures fluctuated within the range of 65,710-66,000 yuan/mt. In the afternoon session, as long positions decreased, the center of the futures market shifted lower, hitting bottom at 65,600 yuan/mt and eventually closing at 65,620 yuan/mt, down 20 yuan/mt or 0.03%. The decline was mainly attributed to reduced short positions. Open interest stood at 6,329 lots, down 221 lots from the previous trading day, while trading volume reached 7,567 lots, an increase of 3,331 lots from the previous day.

From a macro perspective, the overseas Christmas holiday kept the macro environment relatively calm recently. Overnight, the US weekly initial jobless claims came in lower than expected and the previous value, while the US dollar index fluctuated at high levels. Copper prices continued their rangebound fluctuation pattern.

The SHFE copper 2502 contract closed at 74,090 yuan/mt. Based on the BC copper 2502 contract price of 65,620 yuan/mt, its tax-inclusive price is approximately 74,151 yuan/mt. The price spread between the SHFE copper 2502 contract and the BC copper 2502 contract turned into a negative 61 yuan/mt, indicating an inverted price spread.