SHFE Copper Consolidates at High Levels Social Inventory Continues to Decline [March 24 SHFE Market Closing Commentary]

SHFE copper opened lower in the morning, with prices continuously warming up during the day and closing 0.88% higher. The futures market atmosphere was warm, US copper remained high, and domestic refined copper social inventory continued to decrease, allowing SHFE copper to fluctuate upward.

Today, the domestic futures market atmosphere was positive, with most non-ferrous metals rising. The expectation of a US tariff hike on copper remained, and COMEX copper stayed at highs. Copper prices still had strong support below. Everbright Futures stated that as copper prices surged, the price difference between US and LME copper expanded, reaching a maximum of $1,389/mt, with a premium rate of 14%. It can be said that US copper might be the "culprit" behind this round of copper price increases. Additionally, the market may be pricing in a potential increase in the US import tariff on global copper products from the previously expected 10% to 25%.

As of March 24, SMM national mainstream region copper inventories decreased by 12,800 mt to 333,600 mt compared to last Thursday. The destocking trend continued over the weekend, with all regions experiencing varying degrees of destocking, 53,700 mt lower than the same period last year. Recently, copper prices have been fluctuating at highs, with spot premiums narrowing. Social inventory is still declining, and attention should be paid to demand performance under high prices. Regarding supply and demand, Jinrui Futures noted that some smelting maintenance began in March, but recycled smelting has not yet been affected, with high production schedule expectations. On the consumption side, there are signs of weakening downstream consumption, with cable production decreasing and an increase in the use of recycled materials.