Jiangxi Copper: Global Refined Copper Supply Keeps Sufficient in 2018

SMM Morning Meeting Summary: Overnight, LME copper opened at $14,015/mt, drifted higher after the open to touch a high of $14,128/mt, then pulled back to touch a low of $13,926/mt, and rallied again in late trading to close at $14,114.5/mt, up 0.64%. Trading volume reached 21,000 lots, and open interest stood at 267,000 lots, down 6,845 lots from the previous trading day, reflecting a reduction in bear positions. Overnight, the most-traded SHFE copper 2610 contract opened at 107,430 yuan/mt, touched a high of 107,630 yuan/mt during the session, then declined to touch a low of 106,890 yuan/mt, and finally closed at 107,200 yuan/mt, up 0.15%. Trading volume reached 27,000 lots, and open interest stood at 175,000 lots, down 4,878 lots from the previous trading day, reflecting a reduction in bear positions.

The Bank of Canada chose to hold steady earlier this month, but Governor Macklem immediately warned that if inflation remains persistently high, the central bank does not rule out multiple consecutive rate hikes. The Riksbank currently belongs to the dovish camp and is expected to keep its key policy rate unchanged at 1.75% at its meeting later this month, though the market currently also expects its rate to rise later this year.

As the US Fed is about to announce its interest rate decision, the sell-off in US Treasuries has intensified, with the benchmark 10-year Treasury yield climbing to its highest level since 2007. The 30-year Treasury yield, which is more sensitive to geopolitical risks, also continued to rise, reaching as high as 5.40% during the session, a new high since June 2007; the 2-year Treasury yield rose about 4 basis points to 4.68%.