US Fed December Interest Rate Cut Probability Reduces, Market Awaits Further Copper Price Decline [SMM Copper Morning Comment]

Last Friday night, LME copper opened at $9,120.5/mt. Initially, the focus rose, and LME copper reached a high of $9,179.5/mt, then fluctuated downward throughout the session, hitting a low of $8,955.5/mt at the end, and finally closed at $8,971/mt, a decline of 0.59%. Trading volume reached 30,000 lots, and open interest reached 280,000 lots. Last Friday night, the most-traded SHFE copper 2412 contract opened at 74,600 yuan/mt. Initially, it reached a high of 74,630 yuan/mt, then fluctuated downward throughout the session, hitting a low of 73,290 yuan/mt at the end, and finally closed at 73,550 yuan/mt, a decline of 0.26%. Trading volume reached 43,000 lots, and open interest reached 140,000 lots. Macro side, US October retail sales data exceeded expectations, with a monthly rate of 0.4%, and September increase was revised up from 0.4% to 0.8%. Traders reduced their bets on a US Fed interest rate cut in 2025 and cut the probability of a December interest rate cut to about 50%. Meanwhile, US Fed officials indicated no urgent need for a rate cut. Fundamentally, copper prices fell below 74,000 yuan/mt. Overall consumption has warmed up, but due to the previous stabilization of copper prices and the focus on the Copper Conference during the week, the increase in consumption was limited. If copper prices continue to decline, consumption is expected to remain supported. In summary, with consumption warming up and the US dollar index remaining strong, copper prices are expected to stabilize at this level.