Copper Prices Hovered Narrowly on Positive Domestic Macro

LME copper closed at $9,009/mt last Friday evening, a drop of 0.51%. Trading volume was 12,000 lots and open interest stood at 241,000 lots. The most active SHFE 2303 copper contract finished at 69,090 yuan/mt last Friday evening, up 0.16%. Trading volume was 24,000 lots, and open interest stood at 129,000 lots. On the macro front, U.S. inflation is slowing down but at a slower pace. The Fed is still sending out hawkish signals last week, and the market is concerned about its follow-up actions. On fundamentals , SMM data showed that copper inventories across mainstream areas in China increased 9,100 mt on Friday February 17 from Monday February 13, 12,500 mt higher than a week earlier. Despite limited arrivals of imported copper, there were high shipments of domestic copper from smelters to warehouses due to delivery of the SHFE front-month contract. Downstream stockpiling was slow. Downstream demand has not seen a significant improvement and it is unlikely to pick up in the short term. It is expected that copper prices will remain rangebound at high levels due to market optimism over a rebound in the domestic economy.