US Inflation Eases and US Dollar Index Pulls Back, BC Copper Most-Traded Contract Rises [SMM BC Copper Commentary]

SMM, January 16: Today, the most-traded BC copper 2502 futures contract opened at 66,980 yuan/mt, closing with a bullish candlestick as the Bollinger upper band crossed the candlestick body. Overnight, the most-traded BC copper contract hit bottom at 66,870 yuan/mt upon opening. With bulls increasing positions, the futures market broke through 67,000 yuan/mt, and the center continued to rise. During the morning trading session, the market opened with bulls entering, pushing the futures market to a high of 67,860 yuan/mt. Subsequently, bears increased positions, causing the center to pull back. In the afternoon trading session, the BC copper 2502 contract fluctuated and adjusted, with the futures market rebounding near the close, ultimately settling at 67,740 yuan/mt, up 850 yuan/mt or 1.27%. The increase was mainly driven by bulls adding positions, with open interest reaching 4,866 lots, up 223 lots from the previous trading day, and trading volume reaching 7,412 lots, an increase of 1,774 lots from the previous day.

Macro side, overnight data showed that the US December CPI met expectations, while core CPI YoY growth rate slowed and fell below expectations. The easing inflation data improved market expectations for less hawkish US Fed policies. The US dollar index pulled back, coupled with recent crude oil price increases, boosting copper prices upward.

The SHFE copper 2502 contract settled at 76,080 yuan/mt. Based on the BC copper 2502 contract price of 67,740 yuan/mt, its tax-inclusive price is approximately 76,546 yuan/mt. The price spread between the SHFE copper 2502 contract and the BC copper 2502 contract stood at -466 yuan/mt, with the spread remaining inverted and widening compared to the previous trading day.