US Non-Farm Payrolls Data Unexpectedly Surge, US Dollar Index Rises to Pressure LME Copper [SMM Copper Morning Comment]

SMM January 13 News: Last Friday evening, LME copper opened at $9,110/mt, initially rose to a high of $9,130.5/mt, then the center shifted lower and hovered in wide fluctuations throughout the session. During the fluctuations, it hit an intraday low of $9,048.5/mt and continued to fluctuate widely towards the close, finally settling at $9,073.5/mt, down by 0.42%. Trading volume reached 19,000 lots, and open interest stood at 268,000 lots. Last Friday evening, the most-traded SHFE copper 2503 contract opened at 75,370 yuan/mt, initially declined to a low of 74,980 yuan/mt, then rebounded and maintained wide fluctuations, with the center rising during the fluctuations. It hit an intraday high of 75,600 yuan/mt towards the close and finally settled at 75,430 yuan/mt, up by 0.16%. Trading volume reached 28,000 lots, and open interest stood at 140,000 lots. Macro side, US non-farm payrolls data for December last year showed an increase of 256,000 jobs, and the unemployment rate unexpectedly dropped to 4.1%. The strong non-farm data reinforced expectations that the US Fed will pause interest rate cuts later this month. Traders no longer bet on two rate cuts by the Fed this year. The US dollar index closed higher, weighing on LME copper. However, with copper rod enterprises resuming operations before the Chinese New Year and physical buying remaining stable, SHFE copper showed relative strength. Fundamentally, the Shanghai-Guangdong price spread widened again to 300 yuan/mt, with short-term supply tightening in both regions. It is reported that some suppliers have already transferred goods to Guangdong over the weekend, and Shanghai inventory is expected to continue declining this week. In summary, the US dollar index is hovering at highs, and copper prices are expected to have limited upside today.