Copper Prices Down On Rebounding US Dollar Index

The LME was closed on Monday due to the Easter holiday. SHFE 2305 copper contract finished at 68,460 yuan/mt overnight, down 0.45%. Trading volume was 23,000 lots, and open interest stood at 163,000 lots. On the macro front, the US employment report released last Friday was mixed, which strengthened the expectation of a 25 basis point rate hike in the US in May. The US dollar index strengthened overnight, weighing on copper prices.

On the fundamentals, as of Monday April 10, SMM copper inventory across major Chinese markets fell 7,600 mt from last Friday to 194,700 mt, up 59,400 mt YoY.

Specifically, the decline in inventories in east China and south China was mainly due to the downstream stockpiling in the middle of last week when copper prices fell below 69,000 yuan/mt. In addition, shipments arrivals were relatively small. It is expected that imported copper will still flow in this week, but it will be less than last week.