Domestic Manufacturing Slightly Expands, Copper Prices May Be Supported [SMM Copper Morning Comment Dec 2]

Last Friday evening, LME copper opened at $9,006/mt, fluctuated widely throughout the session, reaching a high of $9,027.5/mt at the beginning and a low of $8,980.5/mt during the session, and finally closed at $9,015/mt, up 0.31%. Trading volume reached 13,000 lots, and open interest was 273,000 lots. Last Friday evening, the most-traded SHFE copper 2501 contract opened at 73,720 yuan/mt, fluctuated initially and then declined to a low of 73,620 yuan/mt, followed by an upward fluctuation, reaching a high of 73,920 yuan/mt at the end of the session, and finally closed at 73,900 yuan/mt, up 0.18%. Trading volume reached 23,000 lots, and open interest was 160,000 lots. Macro side, Tokyo's inflation rebound ignited expectations of a rate hike by the Bank of Japan. Japanese media reported that Kazuo Ueda stated that if the yen further depreciates after inflation starts to rise, it will pose a risk to the economic outlook, and he is considering the timing of a potential rate hike. Meanwhile, the NBS announced that the November manufacturing PMI rose by 0.2 percentage points from the previous month, indicating a slight acceleration in the pace of manufacturing expansion, providing some support to copper prices. Fundamentally, end-use sectors maintained a high operating rate supported by previous orders, coupled with good stocking demand over the weekend. Additionally, the shortage of copper scrap also benefits copper cathode consumption. It is expected that spot premiums will continue to rise after returning to cargoes with invoices dated this month. Overall, downstream consumption is expected to remain at a good level with a high operating rate, providing some support to copper prices today.