Trump Announces Victory, Copper Prices Plummet [SMM Copper Morning Comment]

Published: Nov 7, 2024 09:25

Source: SMM

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LME copper opened overnight at $9,529/mt, declined steadily from the beginning to the middle of the session, and touched a low of $9,302/mt before closing at $9,321/mt, down 4.23%.

LME copper opened overnight at $9,529/mt, declined steadily from the beginning to the middle of the session, and touched a low of $9,302/mt before closing at $9,321/mt, down 4.23%. Trading volume reached 45,000 lots, and open interest was 278,000 lots. The most-traded SHFE copper 2412 contract opened overnight at 76,090 yuan/mt, fluctuated downward initially, touched a low of 75,520 yuan/mt during the session, and then slightly fluctuated upward towards the end, closing at 75,770 yuan/mt, down 2.19%. Trading volume reached 69,000 lots, and open interest was 157,000 lots. Macro side, Trump announced his victory, and the US dollar index fluctuated upward, putting pressure on copper prices. Additionally, concerns arose that major electrification initiatives in the US might regress, further suppressing copper demand and pressuring copper prices. It is also noteworthy that the "Fed's mouthpiece" indicated that if the Republicans control both houses of Congress, the US Fed might revise its basic assumptions in December. Fundamentally, a large influx of imported copper led to spot premiums turning into discounts within the week, and the contango structure expanded again, suggesting that suppliers' willingness to sell might decrease. Overall, the strong performance of the US dollar index pressured copper prices, which returned to the 75,000 yuan/mt range. Consumption might improve to some extent, and the market is awaiting the US Fed's interest rate meeting this week. Copper prices are expected to maintain a fluctuating trend before the interest rate cut results are announced.

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