US CPI unexpectedly slowed, copper prices rose overnight [SMM Morning Comment on Copper]

SMM April 11: LME copper opened at $8,942.5/mt overnight, fluctuating upward initially and touching a high of $9,058/mt near the end of the session. The center of prices pulled back toward the end, touching a low of $8,885/mt before slightly rising to close at $8,977.5/mt, up 0.9%. Trading volume reached 28,000 lots, and open interest stood at 298,000 lots. The most-traded SHFE copper 2505 contract opened at 74,770 yuan/mt overnight, fluctuating upward initially and touching a high of 75,340 yuan/mt during the session. The center of prices pulled back toward the end, touching a low of 74,160 yuan/mt before closing at 74,450 yuan/mt, down 0.73%. Trading volume reached 70,000 lots, and open interest stood at 145,000 lots. Macro-wise, the US March unadjusted CPI annual rate was 2.4%, hitting a six-month low and below the market expectation of 2.6%. After the data release, traders bet that the US Fed will resume interest rate cuts in June and may lower the policy rate by a full percentage point by year-end, which weighed on the US dollar. The US dollar index once fell over 2%, benefiting copper prices. On the fundamental side, copper prices surged today, with suppliers showing increased willingness to sell and warrants continuously released. Futures warrants and weekly inventories in the Shanghai region both declined, indicating some supply-side release. As of Thursday, April 10, SMM's mainstream regional copper inventories in China dropped significantly by 31,500 mt WoW to 267,200 mt, down 46,400 mt from the previous Thursday, marking the sixth consecutive week of destocking. Demand side, downstream buyers showed a clear mentality of driving down purchasing prices. Meanwhile, as copper prices surged, market transactions weakened, and downstream buyers did not exhibit sentiment of rushing to buy amid continuous price rise, only matching previous orders by driving down purchasing prices. Price-wise, with macro headwinds weakening, the US dollar declining, and fundamental inventory reductions, copper prices still have some upward momentum in the short term.