US Dollar Index Hovers Near Four-Month Low, Copper Prices Jump Initially and Then Pull Back [SMM Copper Morning Meeting Summary]

Futures Market: Last Friday night, LME copper opened at $9,797/mt, hitting an intraday high of $9,822.5/mt and a low of $9,761.0/mt, before closing at $9,793.0/mt. The overall trend showed an initial rise, followed by a decline and then fluctuations, with a gain of 0.45%. Trading volume was 15,419 lots, and open interest stood at 302,095 lots. On the same night, the most-traded SHFE copper 2504 contract opened at 80,120 yuan/mt, reaching an intraday high of 80,160 yuan/mt and a low of 79,690 yuan/mt, before closing at 79,880 yuan/mt. The overall trend was fluctuating downward, with no % change. Trading volume was 14,333 lots, and open interest stood at 143,098 lots.

【SMM Copper Morning Meeting Notes】 News: (1) Glencore has decided to integrate its copper smelter in Quebec and several recycling facilities in the US into its global zinc smelting division. This move aims to optimize resource allocation, enhance synergies, and improve competitiveness. Glencore's management believes that integrating copper and zinc smelting operations can reduce operating costs, improve overall profitability, and better cope with global market volatility.

Spot Market: (1) Shanghai: On March 14, mainstream standard-quality copper was quoted at a discount of 10 yuan/mt to a premium of 20 yuan/mt against the front-month contract, while high-quality copper was quoted at a premium of 30 yuan/mt to 50 yuan/mt. Recently, as copper prices continued to rise, spot market consumption remained weak, with limited new orders from downstream buyers and pressured purchase willingness, leading to overall weak consumption. Next Monday marks the last trading day for the SHFE copper 2403 contract. Under high price spread fluctuations, downstream consumption is expected to remain sluggish, and spot premiums are unlikely to fluctuate significantly. (2) Guangdong: On March 14, #1 copper cathode in Guangdong was quoted at a premium of 40 yuan/mt to 100 yuan/mt against the front-month contract, with an average premium of 70 yuan/mt, up 10 yuan/mt from the previous trading day. Hydro copper was quoted at a discount of 30 yuan/mt to 10 yuan/mt, with an average discount of 20 yuan/mt, up 30 yuan/mt from the previous trading day. The average price of #1 copper cathode in Guangdong was 79,910 yuan/mt, up 310 yuan/mt from the previous trading day, while the average price of hydro copper was 79,855 yuan/mt, up 345 yuan/mt. Overall, inventory continued to decline, and suppliers stood firm on quotes. However, as the contract rollover approached, downstream buyers were reluctant to purchase in large quantities, leading to moderate trading activity. (3) Imported Copper: On March 14, warrant prices ranged from $45/mt to $55/mt, QP March, with the average price unchanged from the previous trading day. B/L prices ranged from $76/mt to $90/mt, QP April, with the average price up $3/mt from the previous trading day. EQ copper (CIF B/L) was quoted at $15/mt to $25/mt, QP March, with the average price up $5/mt from the previous trading day. These quotes referenced cargoes arriving in mid-to-late March and early April. Intraday transactions remained sluggish, with limited spot cargoes available in bonded zones. The pace of long-term contract declarations for April was slow, and seller activity was relatively weak. (4) Secondary Copper: On March 14, secondary copper raw material prices rose by 200 yuan/mt MoM. Guangdong bare bright copper prices ranged from 72,900 yuan/mt to 73,100 yuan/mt, up 200 yuan/mt from the previous trading day. The price difference between primary metal and scrap was 2,330 yuan/mt, up 362 yuan/mt MoM. The price difference between primary and secondary copper rods was 1,510 yuan/mt. According to the SMM survey, although copper prices have risen by nearly 2,000 yuan/mt, secondary copper raw material suppliers generally hold a bullish view on future copper prices. As a result, they chose to control shipments and wait for further price increases before releasing large volumes. (5) Inventory: On March 14, LME copper cathode inventory decreased by 3,450 mt to 233,750 mt. On March 17, SHFE warrant inventory decreased by 613 mt to 157,649 mt.

Prices: Macro: In the US, the consumer confidence index for March fell for the third consecutive month, while inflation expectations for the coming year rose to 4.9%, the highest level since 2022. Additionally, the US Commerce Secretary indicated that tariffs on imported cars might be imposed next month. The US dollar index jumped initially and then pulled back, remaining near a four-month low, providing support for copper prices. Fundamentals: Copper prices continued to rise, while spot consumption remained weak. Downstream purchase willingness was significantly pressured. As today marks the last trading day for the SHFE copper 2403 contract, spot premiums are unlikely to fluctuate significantly, and downstream consumption may remain sluggish. In summary, with the US dollar index staying at a low level, copper prices are expected to find support at the bottom today.

【The information provided is for reference only. This article does not constitute direct investment research advice. Clients should make prudent decisions and not substitute this for independent judgment. Any decisions made by clients are unrelated to SMM.】