Trade War Escalation Disrupts Market; LME Copper Closed Lower Overnight While SHFE Copper Edged Up [SMM Copper Morning Comment]

SMM March 14 News: Overnight, LME copper opened at $9,760/mt, initially fluctuated downward to a low of $9,713.5/mt, then fluctuated upward, reaching a high of $9,836/mt near the session's end. It slightly pulled back at the close, finally settling at $9,749/mt, down 1.14%. Trading volume was 23,000 lots, and open interest was 298,000 lots. Overnight, the most-traded SHFE copper 2505 contract opened at 79,480 yuan/mt, dipped to 79,340 yuan/mt in early trading, then fluctuated upward, peaking at 80,290 yuan/mt near the session's end. It slightly pulled back at the close, finally settling at 79,800 yuan/mt, up 0.15%. Trading volume reached 58,000 lots, and open interest stood at 214,000 lots. On the macro front, Trump stated that if the EU does not remove tariffs on spirits, he plans to impose a 200% retaliatory tariff on wine and champagne, escalating global trade tensions. Market confidence was hit, US stocks fell, and the US dollar index jumped initially and then pulled back, pressuring LME copper to close lower. Domestically, the central bank held a meeting and indicated plans to implement moderately loose monetary policies, including RRR cuts and interest rate cuts when appropriate, providing strong macro support for SHFE copper. On the fundamentals, supply side, rising copper prices prompted suppliers to hold back cargoes, tightening market circulation and pushing spot premiums higher. Demand side, high copper prices suppressed downstream purchase willingness, leading to sluggish market transactions and a supply-demand stalemate. As of March 13, SMM copper inventories in major regions nationwide fell to 356,000 mt, marking two consecutive weeks of destocking, down 21,000 mt from the year's peak. Looking ahead to next week, due to increased exports and reduced imports, inventories are expected to continue declining, though the pace of decline may narrow. In terms of prices, the macro front presents mixed signals, with escalating trade tensions weighing on market sentiment, while domestic loose monetary policies provide support for copper prices. Copper prices are expected to fluctuate at highs today, with attention on the US dollar index and macro policy developments.