"Terrifying Data" Exceeded Expectations, US Fed's Rate Cut Likely to be Reduced [SMM Copper Morning Comment]

LME copper opened at $9,491/mt overnight, initially fluctuating upward to a high of $9,542/mt, then declining to a low of $9,477.5/mt near the close, and finally rebounding slightly to close at $9,506.5/mt, down 0.88%. Trading volume reached 21,000 lots, and open interest was 278,000 lots. The most-traded SHFE copper 2411 contract opened at 76,300 yuan/mt overnight, initially fluctuating rangebound to a high of 76,530 yuan/mt, then declining to a low of 76,110 yuan/mt near the close, and finally rebounding slightly to close at 76,410 yuan/mt, down 0.4%. Trading volume reached 22,000 lots, and open interest was 137,000 lots. Macro side, US September retail sales month-on-month recorded 0.4%, slightly above expectations; initial jobless claims for the week ending October 12 recorded 241,000, below the expected 260,000. The data reinforced expectations that the US Fed will cut interest rates at a slower pace over the next year and a half, pushing the US dollar index higher and putting pressure on copper prices. Additionally, the market is awaiting China's Q3 economic output data to be released today, which may provide insights into demand prospects. Fundamentally, recent market spot transactions have been dominated by imported non-registered sources. Although copper prices rebounded during the day, downstream purchasing interest remained average, with bargain down purchasing prices. Some traders had to lower prices to ensure transactions, but overall, both traders and downstream activity levels were low, and market trading was sluggish. According to SMM data, as of Thursday, October 17, SMM copper inventories in major regions across China increased by 9,000 mt to 229,000 mt compared to Tuesday, and by 64,000 mt compared to pre-holiday levels, marking the largest inventory buildup in recent years over the two weeks post-holiday. Price side, downstream demand is still slowly recovering, and it will take some time to digest copper inventories. Copper prices are expected to fluctuate downward today.