Social Inventory Significantly Reduced, SHFE Copper Continued to Stabilize [SHFE Market Closing Review on April 11]

SHFE copper opened slightly higher in the morning, with the gains expanding in the afternoon, closing up 1.79%. Macro sentiment was volatile, but the pessimistic atmosphere did not continue to ferment. Domestic refined copper social inventory saw a significant reduction, and SHFE copper continued to stabilize.

Recently, the global trade situation has been volatile, and US stocks weakened again overnight, but the overall atmosphere did not worsen further compared to before. In addition, the overnight US inflation data showed a larger-than-expected cooling, which increased market expectations for subsequent US Fed interest rate cuts. Everbright Futures stated that the US inflation cooling more than expected should have placed the market in a favorable position with enhanced expectations for US Fed interest rate cuts. However, the threat of escalating trade conflicts overshadowed the benefits of slowing inflation, becoming the focus of market attention. After the US government temporarily suspended measures against some countries, investor concerns increased instead of decreasing, leading to a sell-off in US stocks and the US dollar. Domestically, attention is on the performance of the financial markets, with the stock market being a short-term sentiment indicator.

During the week, domestic refined copper social inventory saw a significant reduction, mainly due to the noticeable downward shift in the center of copper prices, increased downstream demand for buying the dip, and limited arrivals in various regions, leading to a clear reduction in social inventory. Xinhu Futures stated that during this round of copper price decline, domestic downstream companies actively entered the market for procurement, resulting in a significant drop in domestic inventory. Additionally, LME inventory continued to decline, providing fundamental support for copper prices. If there are no major macro risk events in the future, copper prices are expected to continue to hold up well.