Oil prices drove down copper prices overnight, consumption recovery is expected to provide support [SMM Copper Morning Comment]

LME copper prices opened at $8600/mt and closed at $8559/mt overnight, down 0.57%, with the highest of $8607.5/mt and the lowest of $8495/mt. The trading volume was 20,000 lots, and open interest stood at 299,000 lots. The most active SHFE 2404 copper contract prices opened at 69060 yuan/mt and finished at 69240 yuan/mt overnight, with the high-end of 69360 yuan/mt and the low-end of 69040 yuan/mt, down 0.19%. The trading volume was 23,000 lots, and open interest stood at 156,000 lots. On the macro front, oil prices fell sharply amid the Fed's continued hawkish remarks, driving copper prices down. At the same time, the United States announced more than 500 new sanctions on Russia, which may affect supply and provide some support for copper prices. This week we also need to pay attention to the latest PCE data in the United States. In terms of fundamentals, from the supply side, as the end of the month approaches, smelters have a need to clear inventories, and imported copper will also gradually flow in. It is expected that supply will continue to increase further from last week's surge in inventories. In terms of consumption, copper prices have continued to rise, which has suppressed downstream consumption. However, after the Lantern Festival, downstream companies will also resume work and production. It is expected that consumption will recover this week driven by the resumption of downstream work and restocking. Overall, supply and consumption are expected to increase. In terms of price, on the whole, the U.S. sanctions against Russia and the downstream resumption of work and production and procurement after the Lantern Festival will play a certain supporting role in copper prices. Copper prices are expected to remain high.