SMM Copper Morning Comment

Published: Dec 22, 2023 09:51

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LME copper prices opened at $8535/mt and closed at $8606/mt in last evening trading, a gain of 0.12%, with the low-end of $8531.5/mt and the high-end of $8630/mt. Trading volume was 15,000 lots, and open interest stood at 280,000 lots. The most active SHFE 2402 copper contract prices opened at 68660 yuan/mt and closed at 69000 yuan/mt last evening, up 0.28%, with the high-end of 69100 yuan/mt and the low-end of 68610 yuan/mt. Trading volumes stood at 31,000 lots and open interest stood at 148,000 lots. On the macro front, the final annualized quarterly rate of real GDP in the United States in the third quarter was 4.9%, lower than the expected 5.20%. This has strengthened the market’s expectations for an interest rate cut that the United States will consider as early as next year. The U.S. index weakened and copper prices rebounded. In terms of fundamentals, from the supply side, the current supply of copper is still tight, and due to the seasonal reduction in port efficiency at the end of the year, the inflow of imported copper during the week was also lower than expected. It is expected to enter the market in large quantities next week. In terms of consumption, although copper prices have fallen slightly, they are still at a high level. Downstream purchasing sentiment has not picked up. Many copper rod factories have shut down their furnaces. Some companies with normal production said that current orders are poor and inventories are gradually increasing. Under high copper prices, market demand is generally suppressed. There will be limited room for copper price increases.

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