Optimistic Sentiment in the Futures Market as the Most-Traded BC Copper Contract Continues to Strengthen [SMM BC Copper Commentary]

SMM, February 7: Today, the most-traded BC copper 2503 futures contract opened at 67,650 yuan/mt and closed with a bullish candlestick. The Bollinger upper band crossed the candlestick body, and the lower shadow pierced the 5-day moving average. Overnight, the most-traded BC copper 03 contract opened with longs reducing positions, and the futures market showed weak fluctuations, bottoming at 67,520 yuan/mt. During the morning trading session, as longs entered the market, the futures rose, breaking through 68,500 yuan/mt. In the afternoon trading session, the most-traded BC copper 03 contract saw further upward movement in its center as shorts reduced positions, reaching a high of 68,780 yuan/mt and finally closing at 68,700 yuan/mt, up by 1,360 yuan/mt or 2.02%. The main driver was shorts reducing positions. Open interest reached 5,813 lots, down by 44 lots compared to the previous trading day, while trading volume reached 10,419 lots, a decrease of 685 lots from the previous trading day.

Macro side, as market sentiment toward the US tariff hike policy gradually eased, the US January non-farm payrolls data is set to be released tonight. Fundamentals side, risks on the raw material side and expectations of post-holiday restocking in China provided support. The atmosphere in the A-share and futures markets was relatively optimistic during the day, and copper prices continued to strengthen.

The SHFE copper 2503 contract closed at 77,250 yuan/mt. Based on the BC copper 2503 contract price of 68,700 yuan/mt, its post-tax price is approximately 77,631 yuan/mt. The price spread between the SHFE copper 2503 contract and the BC copper 2503 contract was -381 yuan/mt, with the spread remaining inverted and widening compared to the previous trading day.