Macro and Fundamentals Lack Resonance, Copper Prices Continue to Face Pressure [SMM Copper Morning Comment]

Overnight, LME copper opened at $9,424/mt, initially reaching a high of $9,426/mt, then declined all the way, hitting a low of $9,282/mt near the close, and finally settled at $9,299/mt, down 1.42%. Trading volume reached 18,000 lots, and open interest was 274,000 lots. Overnight, the most-traded SHFE copper 2412 contract opened at 76,160 yuan/mt, fluctuated rangebound initially, reached a high of 76,240 yuan/mt during the session, then declined all the way, hitting a low of 75,870 yuan/mt near the close, and finally settled at 75,900 yuan/mt, down 0.85%. Trading volume reached 31,000 lots, and open interest was 147,000 lots. Macro side, Trump's proposals for comprehensive tariffs, tax cuts, and large-scale deportation of undocumented immigrants are expected to bring new pressure on inflation and widen the deficit. Many economists have already lowered their expectations for the US Fed to cut interest rates next year. Meanwhile, after Trump's election, the US dollar continued to rebound, with the US dollar index hitting a four-month high, putting pressure on copper prices. Fundamentals side, supply side, as the SHFE copper 2411 contract is approaching its delivery period, traders have a low willingness to sell at low prices, and the subsequent arrivals of domestic copper cathode are expected to decrease, leading to tight spot copper supply. Demand side, due to copper price fluctuations, downstream buyers remain cautious and mostly maintain just-in-time procurement. Additionally, due to concentrated meetings during the week, the trading atmosphere among suppliers is relatively quiet, and overall spot market transactions are mediocre. According to SMM data, as of Monday, November 11, SMM copper inventories in major regions nationwide decreased by 14,700 mt to 177,800 mt compared to last Thursday, but total inventory was 123,300 mt higher compared to 54,500 mt in the same period last year. Price side, in the context of a lack of resonance between macro and fundamentals, copper prices are expected to remain under pressure today.