High Inventory and Sluggish Trading as Market Awaits Data Guidance [SMM Copper Morning Comment]

SMM, February 7: Overnight, LME copper opened higher at $9,325.5/mt, then the center shifted downward, fluctuating rangebound in early trading. It continued to decline during the session, bottoming at $9,258.5/mt, with a slight rebound in the center towards the end of the session, finally closing at $9,289/mt, up 0.2%. Trading volume reached 20,000 lots, and open interest stood at 279,000 lots. Overnight, the most-traded SHFE copper 2503 contract opened at 76,250 yuan/mt, hitting a high of 76,340 yuan/mt in early trading. The center then moved lower amid fluctuations, bottoming at 76,020 yuan/mt during the session. Towards the end, the center slightly rebounded, closing at 76,130 yuan/mt, up 0.29%. Trading volume reached 22,000 lots, and open interest stood at 163,000 lots. Macro side, US initial jobless claims for last week were 219,000, compared to an expectation of 213,000. Meanwhile, there is no further news regarding future US tariffs, and the market is awaiting Friday's US non-farm payrolls data. The US dollar index saw a certain rebound in its center. Additionally, Trump stated that the Interior Secretary would collaborate with the Energy Secretary to increase oil production and lower prices. The decline in crude oil also weighed on copper prices. Overnight, copper prices fell compared to the previous day's closing levels, but the center remained elevated. Fundamentally, most downstream copper rod enterprises are gradually resuming production, but in-plant inventory remains relatively sufficient. Meanwhile, post-holiday social inventories continue to see an inventory buildup. As of Thursday, February 6, SMM data showed copper inventories in major regions nationwide increased by 107,300 mt compared to pre-holiday levels, reaching 273,100 mt. Total inventories were 12,600 mt lower than the 285,700 mt recorded after last year's holiday. Overall, market activity remains sluggish. In summary, the market is awaiting today's US non-farm payrolls data, and copper prices are expected to await further guidance.