LME copper prices opened at $8,565/mt on Monday, hitting a high of $8,574/mt, but dropped to a low of $8,506/mt and finally closed at $8,625/mt. Trading volumes were 15,000 lots, and open interest was 286,000 lots. The most-traded SHFE 2404 copper contract opened at 69,300 yuan/mt, and hit a low of 69,170 yuan/mt before a high of 69,350 yuan/mt, and finally closed at 69,210 yuan/mt. Trading volume was 16,000 lots and open interest was 150,000 lots.
On the macro front, weak US economic data, a free-fall in US stocks and falling US dollar index underpinned copper prices. In addition, there were market positive expectations for the second session of the 14th National People's Congress to be held on the morning of March 5. In terms of fundamentals, as of March 4, mainstream copper stocks in China increased by 15,500 mt from March 1 to 321,200 mt, 13,100 mt higher than the same period of last year and a record high for the same period in the past four years. From the supply side, sustained inventory hike led some holders to hold back positions, denting supply in circulation, but overall supply avoided tightness. In terms of consumption, high copper prices still hurt demand. According to SMM, demand recovery was less than expected and will remain weak in the short term. In terms of price, players looked forward to seeing policy stimulus from the Two Sessions. Copper prices may remain high in the near future.
