Market Risk Appetite Declines as the Most-Traded BC Copper Contract Pulls Back [SMM BC Copper Commentary]

SMM, January 20: Today, the most-traded BC copper 2502 futures contract opened lower and moved downward, starting at 67,760 yuan/mt, closing with a positive candlestick but trading below the daily moving average. On Friday night, the most-traded BC copper contract opened lower with a gap, hitting a high of 67,910 yuan/mt at the open before weakening to test the key level of 67,000 yuan/mt as bulls reduced positions. During Monday's morning trading session, the contract fell below 67,000 yuan/mt as bears increased positions, bottoming at 66,750 yuan/mt. In the afternoon trading session, the BC copper 2502 contract fluctuated within the range of 66,770-66,950 yuan/mt, eventually closing at 66,850 yuan/mt, down 1,020 yuan/mt or 1.50%. The decline was mainly driven by bulls reducing positions, with open interest decreasing by 191 lots to 5,047 lots, while trading volume increased by 1,302 lots to 6,549 lots compared to the previous trading day.

Macro side, with Trump’s inauguration imminent, the initial phase brought significant macro sentiment instability. Coupled with the approach of the Chinese New Year holiday, investors' risk aversion sentiment increased, weakening bullish drivers and leading to an intraday pullback in copper prices.

The SHFE copper 2502 contract closed at 75,300 yuan/mt. Based on the BC copper 2502 contract price of 66,850 yuan/mt, its post-tax price is approximately 75,541 yuan/mt. The price spread between the SHFE copper 2502 contract and the BC copper 2502 contract stood at -241 yuan/mt, with the spread remaining in backwardation and narrowing compared to the previous trading day.