The Rebound of the US Dollar Index Suppresses Copper Prices; Most-Traded BC Copper Futures Contract Closes Lower [SMM BC Copper Commentary]

SMM, February 27: Today, the most-traded BC copper 2504 futures contract opened at 68,820 yuan/mt, closed with a bearish candlestick, and traded below the daily moving average, with the lower shadow piercing the 20-day moving average. Overnight, the most-traded BC copper 04 contract opened higher with a gap, reaching a high of 68,940 yuan/mt as bulls entered the market. However, as bulls reduced positions, the futures market center shifted lower. During the morning trading session, the futures fluctuated within the range of 68,460-68,660 yuan/mt. In the afternoon trading session, the most-traded BC copper 04 contract saw an increase in short positions after the opening, hitting bottom at 68,380 yuan/mt before slightly rebounding, and finally closed at 68,560 yuan/mt, down 230 yuan/mt or 0.33%. The decline was mainly attributed to reduced long positions, with open interest at 7,925 lots, down 98 lots from the previous trading day, and trading volume at 8,742 lots, a decrease of 4,430 lots from the previous trading day.

Macro side, uncertainty surrounding US tariffs fluctuated sentiment, and the high price spread between COMEX and LME markets became normalized. Against the backdrop of ore supply tightness in fundamentals, copper prices found strong support on the downside. The US dollar index slightly rebounded, exerting some pressure on non-ferrous metals, leading to a decline in copper prices during the day.

The SHFE copper 2504 contract closed at 77,070 yuan/mt. Based on the BC copper 2504 contract price of 68,560 yuan/mt, its post-tax price is approximately 77,473 yuan/mt. The price spread between the SHFE copper 2504 contract and the BC copper 2504 contract was -403 yuan/mt, maintaining a backwardation structure and narrowing compared to the previous trading day.