Powell's Cautious Stance on Interest Rate Cut Pressures Copper Prices Overnight [SMM Morning Comment on Copper]

SMM February 12 News: Overnight, LME copper opened at $9,358/mt, fluctuated rangebound initially, then dipped to $9,315/mt. During the session, it fluctuated upward, reaching a high of $9,366/mt near the close, and finally settled at $9,356.5/mt, down by 1.02%. Trading volume reached 18,000 lots, and open interest stood at 288,000 lots. Overnight, the most-traded SHFE copper 2503 contract opened at 76,750 yuan/mt, dipped to 76,530 yuan/mt in early trading, consolidated sideways during the session, and fluctuated rangebound near the close, reaching a high of 76,860 yuan/mt before settling at 76,780 yuan/mt, down by 0.65%. Trading volume reached 30,000 lots, and open interest stood at 178,000 lots. Macro side, US Fed Chair Powell stated in his opening remarks at the Senate Banking Committee hearing that given the economy's "overall strength," low unemployment rate, and inflation still above the Fed's 2% target, the Fed is not in a hurry to lower short-term interest rates again, leading to a decline in copper prices. Meanwhile, the market is awaiting more specific information regarding potential trade tariffs by former President Trump. Fundamentally, market sources indicated that due to the widening price spread between futures contracts, suppliers registered a large amount of inventory as warehouse warrants before the delivery of the SHFE copper 2502 contract. Downstream demand has not fully recovered, and although inventory has decreased, cargo pick-up remains primarily demand-driven. Post-holiday spot trading activity has been lackluster. In terms of prices, the market is currently in a wait-and-see mode. Today, the US January CPI data will be released, and copper prices are expected to stabilize.