SMM News on May 20: Overnight, LME copper opened at $9,500.5/mt. After fluctuating higher in early trading, it pulled back and touched a low of $9,495/mt. It then fluctuated considerably, approaching the close, it touched a high of $9,536/mt before pulling back slightly to close at $9,516/mt, up 0.81%. Trading volume reached 11,000 lots, and open interest reached 294,000 lots. Overnight, the most-traded SHFE copper 2506 contract opened at 77,980 yuan/mt. After fluctuating rangebound in early trading, it touched a low of 77,970 yuan/mt. It then fluctuated higher and approached the close, touching a high of 78,180 yuan/mt before closing at 78,160 yuan/mt, up 0.54%. Trading volume reached 18,000 lots, and open interest reached 168,000 lots. On the macro side, Moody's downgraded the deposit ratings of some major banks, including Bank of America and JPMorgan Chase, citing the downgrade of the US's rating last Friday, which led to a sharp drop in the US dollar index, providing bullish support for copper prices. On the fundamental side, from the supply side, a large number of delivery warrants had not yet been released, leading to tight market liquidity and low willingness among suppliers to sell at low prices. From the demand side, although copper prices fell during the day, trading sentiment remained poor, with just-in-time procurement from some downstream consumers dominating. As of Monday, May 19, SMM's national copper inventory in major regions increased by 7,200 mt WoW to 139,200 mt, marking the second consecutive week of inventory buildup. Currently, the market has some support for spot premiums due to tight liquidity, but factors such as inventory buildup and the expected release of warrants today are expected to curb spot premiums. In terms of prices, copper prices are expected to still have some upside room today.
