U.S. Tariff Escalation Expectations Suppress Risk Appetite; March Consumption Recovery Becomes the Focus [SMM Copper Morning Comment]

SMM March 3 News: Last Friday evening, LME copper opened at $9,334/mt. In early trading, the center moved higher, reaching a peak of $9,382/mt, then fluctuated downward to a low of $9,325/mt during the session. By the end of trading, it rebounded and closed at $9,361/mt, down 0.55%. Trading volume reached 21,000 lots, and open interest stood at 293,000 lots. Last Friday evening, the most-traded SHFE copper 2504 contract opened at 76,850 yuan/mt. It initially moved higher, peaking at 76,990 yuan/mt, then fluctuated downward to a low of 76,630 yuan/mt during the session. By the end of trading, the center rose again, closing at 76,840 yuan/mt, down 0.22%. Trading volume reached 26,000 lots, and open interest stood at 160,000 lots. Macro side, the US Commerce Secretary stated that on March 4, tariffs would be imposed on Canada and Mexico, with tariff levels to be determined by Trump. Additionally, reciprocal tariffs would be implemented in April. Last Friday evening, the US dollar index closed higher, as market concerns over US tariffs and trade wars weighed on global economic trade, putting pressure on copper prices. Fundamentally, post-holiday consumption has gradually improved, but the overall recovery pace remains slow. Entering early March, if copper prices undergo a significant pullback, consumption may see further release. In summary, with the US dollar index pulling back and destocking in some regions, copper prices are expected to find some support today.