Optimistic Macro Sentiment in the Afternoon, BC Copper Most-Traded Contract Closed Higher [SMM BC Copper Commentary]

SMM, February 20: Today, the most-traded BC copper 2503 futures contract opened at 68,790 yuan/mt and closed with a bullish candlestick, with the lower shadow piercing through the 5-day and 10-day moving averages. Overnight, the most-traded BC copper 03 contract opened higher with a gap and fluctuated downward as bulls reduced positions, hitting bottom at 68,550 yuan/mt by the session's end. During the morning trading session, the futures market rose as bulls entered, lifting the center higher. In the afternoon trading session, the most-traded BC copper 03 contract fluctuated upward as bulls increased positions, breaking through the 69,000 yuan/mt threshold and peaking at 69,120 yuan/mt before closing at 69,040 yuan/mt, up 720 yuan/mt or 1.05%. The increase was mainly driven by bullish position-building, with open interest reaching 5,009 lots, up 88 lots from the previous trading day, and trading volume reaching 7,825 lots, an increase of 1,161 lots from the previous trading day.

Macro side, as negotiations in the Russia-Ukraine conflict progressed and the potential for a trade agreement between China and the US emerged, market sentiment improved, leading to gains in most base metals in the afternoon. Copper prices experienced strong fluctuations and closed higher again.

The SHFE copper 2503 contract closed at 77,620 yuan/mt. Based on the BC copper 2503 contract price of 69,040 yuan/mt, its post-tax price is approximately 78,015 yuan/mt. The price spread between the SHFE copper 2503 contract and the BC copper 2503 contract stood at -395 yuan/mt, with the spread remaining inverted and widening compared to the previous trading day.