SMM Copper Morning Comment

LME copper prices opened at $8552.5/mt and closed at $8625/mt in last Friday trading, a gain of 1.84%, with the low-end of $8511/mt and the high-end of $8640/mt. Trading volume was 32,000 lots, and open interest stood at 266,000 lots. The most active SHFE 2401 copper contract prices opened at 68660 yuan/mt and closed at 68990 yuan/mt last evening, up 0.97%, with the high-end of 69150 yuan/mt and the low-end of 68660 yuan/mt. Trading volumes stood at 40,000 lots and open interest stood at 172,000 lots.

On the macro front, last Friday, Powell's speech failed to dispel traders' bets on interest rate cuts next year, and U.S. bond yields plunged during the session. In addition, the U.S. ISM manufacturing PMI index recorded 46.7, which was lower than expected. It was below 50 for the 13th consecutive month, setting the longest record in more than 20 years. On Fundamentals, as of December 1, SMM copper inventories across major Chinese markets stood at 54,900 mt, down 3,700 mt from last Monday and 57,800 mt lower than the same period last year. Limited shipments arrivals of imported and domestic copper over East China and no decline in downstream purchasing lowered inventories. In South China, due to the increase in arrivals from surrounding areas and production halts at some downstream resulted in an increase in inventory. In terms of consumption, with high prices, demand is expected to remain suppressed. Due to the influence of low inventory and macro sentiment, copper prices will move strongly in the near future.