Copper futures prices fell first and then rose, limited downside space in near term

The Federal Reserve remained interest rate unchanged at its May interest rate meeting, in line with market expectations, but the possibility of no rate cuts this year still exists; on May 3, the US non-farm data and unemployment rate for April cooled, and market expectations for one or two rate cuts this year have risen. The probability of a first rate cut in September increased, and the US dollar index fell below the 105 mark. During the suspension of SHFE trading, LME copper prices fell to around $9,750/mt. After the Labour Day holiday, SHFE copper prices fell. The US dollar index rebounded to above 105. The euro against the US dollar fell during the week. China's Caixin Services PMI for April was 52.5, and domestic macroeconomic sentiment continued to be positive. As the yen plummeted, the Chinese yuan appreciated and became the world's fourth largest payment currency. During the Labour Day holiday, the offshore yuan regained the 7.2 mark. On May 9, Hangzhou and Xi'an fully lifted restrictions on property purchases, which injected confidence into the real estate market. A-shares rose strongly. Copper prices rebounded at the end of the week.

While smelters had export plans after the reopening of the export window, there was no obvious increase in bonded zone inventory and LME inventory. Some exported goods are currently on the way. In the week of May 13, many countries will release CPI data. The market expects the US CPI to decline in April. Expectations for the Fed to cut interest rates this year may increase. It is expected that LME copper will move between $9,800-10,100/mt, and SHFE copper will move between 79,000-81,500 yuan/mt. In the spot market, considering the current contango structure, the spot discounts will remain large after the delivery of the SHFE front-month contract. Spot discounts will stand at 70-0 yuan/mt against the May contract before the delivery and 200-120 yuan/mt against the SHFE 2406 copper contract after the delivery.

According to the SMM price model, the price range of the closing price of the most active SHFE copper contract will be [78,040, 82,395], with an average of 80,240. The unit is yuan/mt. The extreme price range is [75,760, 84,240], the normal price range is [77,280, 83,010], and the conservative price range is [78,800, 81,780]. Prices will fall after rising or consolidate at highs in the week of May 13. Prices will meet resistance in the range of [81,780, 83,010] while finding support in the range of [77,280, 78,800].