Copper prices weakened amid dovish Fed meeting minute

LME copper prices opened at $8040/mt and closed at $8001/mt in overnight trading, a drop of 0.35%, with the low-end of $7988.5/mt and the high-end of $8073.5/mt. Trading volume was 16,000 lots, and open interest stood at 271,000 lots. The most active SHFE 2311 copper contract prices opened at 66680 yuan/mt and closed at 66650 yuan/mt last evening, up 0.03%, with the high-end of 66910 yuan/mt and the low-end of 66510 yuan/mt. Trading volumes stood at 26,000 lots and open interest stood at 158,000 lots.

On the macro front, the minutes of the September U.S. meeting stated that it was generally believed that inflation faced upward risks and that monetary policy risks were more two-way. All participants agreed to maintain high interest rates for a period of time and agreed that they could proceed with caution.

In terms of fundamentals, the market transaction activity in East China yesterday was lower than that on Tuesday, mainly because some downstream companies have completed replenishment, while spot premiums and discounts were relatively strong due to the narrowing of the price spread between the SHFE front-month and next-month contracts and the decline in SHFE copper prices; inventories in South China showed a significant decline. As copper prices fell, downstream enthusiasm for replenishment increased, but the arrival volume was not large. The spot premium and discount rose yesterday. In terms of consumption, although the lower copper price has a certain stimulating effect on downstream purchases, most companies are currently more cautious and do not stock up on goods in large quantities. In terms of price, most companies have maintained a cautious attitude recently which, coupled with the Federal Reserve's decision to maintain high interest rates, will prevent copper prices from rebounding in the near future.