US Fed Rate Cut Expectations Increased, Copper Prices Rose Overnight [SMM Copper Morning Comment]

Overnight, LME copper opened at $9,675/mt, initially dipped to a low of $9,619/mt, then fluctuated upward, peaking at $9,749/mt by the end of the session, and finally closed at $9,737.5/mt, a decrease of 0.55%. Trading volume reached 19,000 lots, and open interest was 292,000 lots. Overnight, the most-traded SHFE copper 2411 contract opened lower at 76,850 yuan/mt, then maintained a fluctuating upward trend, peaking at 77,560 yuan/mt by the end of the session, and finally closed at 77,270 yuan/mt, a decrease of 0.34%. Trading volume reached 34,000 lots, and open interest was 160,000 lots. Macro side, the US September non-seasonally adjusted CPI year-on-year rate was 2.4%, declining for the sixth consecutive month but exceeding expectations across the board. US Fed officials stated that shifting policy to neutral over time is appropriate, with the overall trend clearly showing a significant drop in inflation and the job market cooling to full employment levels. Expectations for a Fed rate cut increased, leading to a slight rise in copper prices. Domestically, several banks announced that the mortgage rate on existing home loans would be uniformly reduced by 30 basis points below the LPR. Fundamentally, although copper prices currently show a downward trend, the price spread between front-month and next-month contracts is large, and prices remain high. There is no significant improvement in downstream restocking demand. As of Thursday, October 10, SMM copper inventories in major regions nationwide increased by 4,700 mt to 203,600 mt compared to Tuesday, and increased by 38,100 mt compared to before the holiday. The post-holiday first-week inventory accumulation was lower than the same period last year, which was 44,200 mt. Overall, domestic consumption has not shown significant improvement. The market is expected to see more actual real estate spending announced at the Ministry of Finance press conference on Saturday. Copper prices are expected to stabilize today.