Policymakers' Hawkish Speeches to Put Pressure on Copper Prices after Price Declines

SHANGHAI, Apr 21 (SMM) – LME copper prices closed at $8,884/mt overnight, a decline of 0.96%. Trading volume was 16,000 lots and open interest stood at 252,000 lots. The most active SHFE 2305 copper contract finished at 68,900 yuan/mt overnight, down 0.83%. Trading volume was 32,000 lots, and open interest stood at 134,000 lots.

On the macro front, the number of initial jobless claims in the US increased last week. The weak data strengthened market expectations for a US recession and further supported the view that the Federal Reserve may pause in June after raising interest rates again next month. The US index went lower.

In terms of fundamentals, spot quotes fell sharply yesterday, mainly due to aggressive shipments and weak consumption. The overall supply of cargoes in the market was relatively ample. The market expected that there would be warrants being offered for sale after the delivery of the April contract. This, coupled with the inflows of imported copper, weighed on spot quotes.

In terms of consumption, downstream processing companies only restocked as required, and this situation is unlikely to change in the short term under the high copper prices. The Fed's interest rate hike path is expected to guide copper prices, and some policymakers' hawkish speeches put pressure on copper prices.