The Domestic Futures Market Weakened During the Day, With the Most-Traded BC Copper Contract Closing Lower [SMM BC Copper Commentary]

SMM March 4 News: Today, the most-traded BC copper 2504 futures contract fluctuated considerably, opening at 68,740 yuan/mt and closing lower for the day. Overnight, the most-traded BC copper 04 contract opened higher with a gap, strengthened as bulls dominated the futures market, reaching a high of 68,910 yuan/mt before undergoing considerable adjustments amid a tug-of-war between longs and shorts. During the morning trading session, as bears entered the market, the center of the futures market shifted lower. In the afternoon trading session, the most-traded BC copper 04 contract continued to decline, hitting bottom at 68,410 yuan/mt and eventually closing at 68,450 yuan/mt, down 120 yuan/mt or 0.18%. The decline was mainly attributed to an increase in short positions, with open interest rising to 7,073 lots, up 20 lots from the previous trading day. Trading volume reached 7,392 lots, down 1,553 lots from the previous day.

Macro side, Trump announced that reciprocal tariffs would take effect on April 2, with a 25% tariff on Canada and Mexico to be implemented on March 4. The US February ISM Manufacturing PMI recorded 50.3, falling short of expectations, while the weakening US dollar index provided support for copper prices. Amid external risks and concerns, and as China entered the Two Sessions, the market remained cautious, leading to a weaker futures market and a decline in the most-traded BC copper contract.

The SHFE copper 2504 contract closed at 76,940 yuan/mt. Based on the BC copper 2504 contract price of 68,450 yuan/mt, its post-tax price is approximately 77,349 yuan/mt. The price spread between the SHFE copper 2504 contract and the BC copper 2504 contract stood at -409 yuan/mt, with the spread remaining inverted and narrowing compared to the previous trading day.