SMM Copper Morning Comment

LME copper prices opened at $8381.5/mt and closed at $8451/mt in overnight trading, a gain of 0.91%, with the low-end of $8370.5/mt and the high-end of $8484/mt. Trading volume was 23,000 lots, and open interest stood at 267,000 lots. The most active SHFE 2401 copper contract prices opened at 67890 yuan/mt and finished at 68280 yuan/mt overnight, up 0.71%, with the low-end of 67890 yuan/mt and the high-end of 68390 yuan/mt. Trading volume was 53,000 lots and open interest stood at 165,000 lots.

On the macro front, Fed officials are still divided on whether interest rate hikes are coming to an end, but the mainstream view is that the tightening policy is coming to an end. Domestically, Pan Gongsheng, governor of the central bank, said he expects to successfully achieve the 5% economic growth target throughout the year. China's real estate industry is seeking a new balance and has seen some signs of positive development. China's CPI is gradually bottoming out and rebounding, and PMI has also seen some positive changes. In terms of fundamentals, the premiums and discounts in East China fell as expected yesterday. This was mainly due to the fact that most downstream companies were bearish on the market outlook, coupled with the poor performance of terminal orders, resulting in low market purchasing. If the backwardation structure continues to expand, premiums and discounts will further fell; premiums and discounts in South China also fell, mainly due to the increase in arrivals and inventory. Buyers were also bearish on the market outlook, and sellers lowered prices. In terms of consumption, spot quotes fell and demand will grow. Due to the influence of macro sentiment, copper prices will move strongly in the near future.