SMM Copper Morning Comment: U.S. retail sales data exceeds expectations, copper prices fall overnight

LME copper prices opened at $8326.5/mt and closed at $8283.5/mt in overnight trading, a drop of 0.74%, with the low-end of $8260.5/mt and the high-end of $8343.5/mt. Trading volume was 25,000 lots, and open interest stood at 276,000 lots. The most active SHFE 2403 copper contract prices opened at 67820 yuan/mt and closed at 67620 yuan/mt last evening, down 0.46%, with the high-end of 68160 yuan/mt and the low-end of 67590 yuan/mt. Trading volumes stood at 20,000 lots and open interest stood at 149,000 lots. On the macro front, U.S. retail sales data in December exceeded expectations by 0.6%. Swap contracts showed that the probability of the Federal Reserve cutting interest rates in March dropped to about 50%. The market began to accept the prospect of delaying interest rate cuts. The U.S. index rose, weighed on copper prices. In terms of fundamentals, from the supply side, imported copper has gradually flowed into the domestic trade market in East China in the past two days, and warehouse receipts have also been released. The spot market has relatively abundant supply of goods. In terms of consumption, the copper prices continue to decline, and downstream processing companies are still afraid of price falling. Only some small factories are still enthusiastic about purchasing. If copper prices can remain stable, demand is expected to increase. In terms of price, it is expected that copper prices will continue to be under pressure from the US dollar.