Overseas Market Pulls Back, SHFE Copper Follows Suit [March 21 SHFE Market Closing Commentary]

SHFE copper fluctuated upward in the early session but then sharply reversed, closing down 0.91%. The overseas market pulled back, and the domestic market followed suit with an adjustment. Additionally, precious metals and the domestic stock market weakened today, creating a bearish market sentiment, which led to an expanded decline in SHFE copper. Overnight, the US dollar index rebounded slightly, and LME copper pulled back after attempting to break the $10,000 level. During the day, both the domestic stock market and precious metals softened, maintaining a bearish market atmosphere, putting pressure on SHFE copper. Regarding recent macro developments, Everbright Futures noted that the US Fed agreed to continue pausing interest rate cuts at its March meeting, keeping the target policy rate range at 4.25%-4.5%, in line with market expectations. The meeting's description of the economy and employment alleviated concerns about the recent slowdown in US economic data, but financial markets still require more definitive data for support. After the meeting, the newly appointed US president called on the Fed to cut interest rates. Recently, the price center of copper has been continuously shifting upward. Although refined copper social inventory continues to decrease, downstream consumption in the Shanghai area remains lackluster, and spot premiums have pulled back. Attention should be paid to the ongoing process of social inventory reduction. J&R Futures stated that downstream consumption has seasonally improved MoM, but the recent strength in prices may test the ability of consumption to sustain. Looking ahead, market bets on tariffs are widening the COMEX price spread, and logistics issues may continue to cause tight supply in other regions. Overall, this is expected to keep copper prices on an upward trend. It is important to note that the rising price center may temporarily impact consumption, leading to pullback pressure. However, from a fundamental perspective, the expected pullback will be limited, and buying opportunities should be watched.