Surprising Pullback in Economic Data, Weaker US Dollar Index Supports Copper Prices [SMM Morning Comment on Copper]

SMM January 17 News: Overnight, LME copper opened at $9,259/mt, fluctuated downward initially, and hit a low of $9,210/mt during the session. It then rebounded, fluctuated downward again before recovering, and reached a high of $9,267.5/mt at the session's end, finally closing at $9,245/mt, up by 0.3%. Trading volume reached 20,000 lots, and open interest stood at 286,000 lots. Overnight, the most-traded SHFE copper 2503 contract opened at 76,300 yuan/mt, hit a low of 76,070 yuan/mt early in the session, then fluctuated upward to a high of 76,500 yuan/mt. Subsequently, the center of fluctuations shifted downward, and it finally closed at 76,280 yuan/mt, up by 0.49%. Trading volume reached 27,000 lots, and open interest stood at 167,000 lots. Macro side, the US "terror data" unexpectedly pulled back to 0.4%. US Fed Governor Waller suggested that the possibility of an interest rate cut in March cannot be ruled out, and if data performs well, there could be 3–4 interest rate cuts this year. The US dollar index softened to some extent, providing support for copper prices, while the market is anticipating more favorable domestic consumption policies. Fundamentally, as year-end approaches, high copper prices have led to overall weak market activity, with subdued downstream demand and insufficient pre-holiday stockpiling by downstream enterprises. In summary, physical buying has weakened, and copper prices are expected to face some resistance today.