Fewer Arrivals During Long-Term Contract Negotiations, Year-End Rush to Meet Deadlines Drives Weekly Destocking of Copper Cathode [SMM Copper Morning Comment Dec 17]

Overnight, LME copper opened at $9,053/mt, initially dipped to a low of $9,032/mt, and then climbed steadily to an intraday high of $9,109.5/mt. It subsequently fluctuated downward, consolidated at the end of the session, and finally closed at $9,065/mt, up 0.09%. Trading volume reached 14,000 lots, and open interest stood at 270,000 lots. Overnight, the most-traded SHFE copper 2501 contract opened lower at 74,440 yuan/mt, rose to a high of 74,860 yuan/mt in early trading, then fluctuated downward, consolidated at the end of the session, and finally closed at 74,640 yuan/mt, up 0.23%. Trading volume reached 18,000 lots, and open interest stood at 137,000 lots. Macro side, the US December S&P Global Manufacturing PMI preliminary reading came in at 48.3, lower than expected and hitting a three-month low. Although the services sector still exceeded expectations in growth, the US dollar index fell back from highs overnight, providing some support to copper prices. Additionally, the PBoC stated that it would implement appropriately accommodative monetary policies, including timely RRR cuts and interest rate cuts, which also benefited copper prices. Fundamentally, as the year-end approaches, there remains some consumption support, coupled with fewer arrivals during long-term contract negotiations, leading to a destocking trend for copper cathode. As of Monday, December 16, SMM copper inventories in major regions nationwide decreased by 19,200 mt compared to last Thursday, reaching 103,100 mt. However, total inventories were 39,800 mt higher than the 63,300 mt recorded in the same period last year. In summary, as the year-end approaches, consumption may gradually weaken, and copper prices are expected to lack sustained upward momentum today.