China Announced Fiscal Stimulus Measures, Boosting Copper Prices [SMM Copper Morning Comment]

LME copper opened at $9,948.5/mt overnight, initially fluctuating rangebound before declining to a low of $9,945/mt. It then rose steadily, reaching a high of $10,090/mt near the close, and finally closed at $10,090/mt, up 2.95%. Trading volume reached 39,000 lots, and open interest was 288,000 lots. Overnight, the most-traded SHFE copper 2411 contract opened at 78,470 yuan/mt, initially dipping to 77,880 yuan/mt, then rising to a high of 78,960 yuan/mt during the session, and finally consolidating to close at 78,880 yuan/mt, up 1.91%. Trading volume was 81,000 lots, and open interest was 177,000 lots. Macro side, the US Q2 real GDP annualized rate final value recorded 3%, consistent with expectations and previous values. Initial jobless claims for the week ending September 21 were 218,000, below the expected 225,000, marking a new low since the week of May 18. US Fed Governor Cook expressed full support for last week's 50 basis point rate cut, and the US dollar index fluctuated downward, benefiting copper prices. Additionally, after easing monetary policy to boost the economy, China announced fiscal stimulus measures, leading to gains in global stock markets and boosting copper prices. Fundamentally, supply side, the widening SHFE copper Backwardation structure led to increased selling by traders, combined with a large influx of imported goods, increasing copper cathode spot supply and putting pressure on premiums. Demand side, with copper prices fluctuating at highs, new orders from downstream decreased, and some downstream sectors had already completed restocking, leading to sluggish spot market transactions. However, social inventory continued to fall. According to SMM, as of Thursday, September 26, SMM copper inventory in major regions nationwide decreased by 11,200 mt from Monday to 154,000 mt, and by 38,000 mt from last Thursday, marking the 12th consecutive week of destocking, with the destocking speed accelerating. Total inventory was 81,000 mt higher compared to 73,000 mt in the same period last year. Price side, with macro and fundamental resonance, copper prices are expected to fluctuate upward.