US Dollar Index Hits New Two-Year High, Copper Prices Face Resistance [SMM Morning Comment on Copper]

SMM, January 3: Overnight, LME copper opened at $8,776.5/mt, initially bottomed at $8,766/mt, then its center rose and maintained wide fluctuations, peaking intraday at $8,819/mt before finally closing at $8,801/mt, up 0.22%. Trading volume reached 18,000 lots, and open interest stood at 258,000 lots. Overnight, the most-traded SHFE copper 2502 contract opened at 73,130 yuan/mt, initially declined to a low of 72,780 yuan/mt, then its center gradually rose during fluctuations, peaking at 73,250 yuan/mt near the close and finally settling at 73,190 yuan/mt, down 0.15%. Trading volume reached 37,000 lots, and open interest stood at 160,000 lots. Macro side, the market expects Trump's policies to boost the US dollar, with the US dollar index continuing to hit new highs since November 2022, exerting pressure on copper prices. Domestically, during a survey in Shandong, Qiang Li emphasized the need to continue implementing trade-in policies for consumer goods this year and vigorously promote the construction of battery swapping infrastructure. Fundamentally, on the first trading day after the New Year’s holiday, copper prices fell while premiums rose, but downstream restocking demand was moderate, with overall trading only slightly better than before the holiday. As of Thursday, January 2, SMM copper inventories in major regions nationwide increased by 1,200 mt from Monday to 114,300 mt, up 8,900 mt from last Thursday, marking the second consecutive week of inventory growth. In summary, with the US dollar index continuing to hit new highs and manufacturing consumption relatively weak, copper prices are expected to face resistance above.