SMM Copper Morning Comment

LME copper prices opened at $8328/mt and closed at $8420/mt in last evening trading, a rise of 1.09%, with the high-end of $8427.5/mt. Trading volume was 20,000 lots, and open interest stood at 278,000 lots. The most active SHFE 2403 copper contract prices opened at 68010 yuan/mt and closed at 68110 yuan/mt last evening, down 0.31%, with the high-end of 68250 yuan/mt. Trading volumes stood at 22,000 lots and open interest stood at 149,000 lots. On the macro front, former Federal Reserve official Bullard urged the Federal Reserve to cut interest rates as soon as possible, saying that if the rate cut is too slow, it may have to cut interest rates by 50 basis points at the next meeting. According to the content of the party committee meeting, the market expects China to release more stimulus policies, and copper prices stabilized and rebounded. In terms of fundamentals, from the supply side, there is a certain inflow of low-priced imported copper, and the supply is still relatively sufficient. In terms of consumption, there is currently a certain demand for stockpiling in the downstream, but it has not had a significant impact on overall consumption for the time being. Premiums were still falling, and the oversupply situation has not changed. Overall, if copper prices rise again, it may inhibit consumption and slow down the pace of downstream stockpiling. Taken together, the former "Eagle King" of the Federal Reserve has made dovish statements, and the Red Sea crisis continues to escalate. There is still a risk aversion in the market, but the current consumption activity is not high, and the upside space for copper prices is expected to be limited.