SHFE copper prices to be guided by LME copper [SMM Copper Morning Comment]

LME copper prices opened at $9324/mt and closed at $9348/mt overnight, a drop of 0.33%, with the low-end of $9276/mt and the high-end of $9358.5/mt. Trading volume was 18,000 lots, and open interest stood at 318,000 lots. SHFE did not conduct night trading yesterday. On the macro level, the number of non-farm payrolls in the United States in March increased far more than expected to 303,000, and the unemployment rate fell slightly to 3.8% in March. After the data was released, the probability of the Federal Reserve cutting interest rates in June was reduced to nearly 50%. The swap market postponed the date of the Federal Reserve's first rate cut from July to September. Federal Reserve officials sounded hawkishly, and the US dollar index closed slightly higher, which weighed on copper prices. In terms of fundamentals, the arrival of imported copper before the Qingming Festival was relatively small, and the smelters entered a maintenance period in April, so the domestic supply may decrease. However, the arrivals of imported copper are expected to increase in the near future, and the total supply is expected to increase slightly this week. In terms of consumption, as copper prices have surged again, downstream stocking before the holiday was on demand. It is expected that there will be a certain demand for replenishment after the holiday, but if copper prices remain at a high level, downstream purchasing sentiment will remain cautious. On the fundamentals, as of April 3, copper inventory across major Chinese markets decreased by 3,200 mt from last Monday to 388,000 mt. On the whole, the postponement of the expected rate cut and the hawkish remarks of the Federal Reserve officials will weigh on the copper price. During the Qingming Festival, LME copper price once again surged to around US$9,350 per ton. It is expected that the SHFE copper price today will be guided higher by the LME copper price.