Lack of positive news, volatility remains the main theme [SMM Copper Morning Comment]

SMM, May 23: Overnight, LME copper opened at $9,463.5/mt, dipping to a low of $9,433.5/mt shortly after the opening bell. It then fluctuated upward, reaching a high of $9,519.5/mt near the close, ultimately closing at $9,519.5/mt, up 0.34%. Trading volume reached 14,000 lots, and open interest stood at 287,000 lots. Overnight, the most-traded SHFE copper 2506 contract opened at 77,730 yuan/mt, dipping slightly to a low of 77,600 yuan/mt shortly after the opening bell. It then fluctuated upward, reaching a high of 77,910 yuan/mt near the close, ultimately closing at 77,820 yuan/mt, down 0.12%. Trading volume reached 20,000 lots, and open interest stood at 153,000 lots. On the macro front, Trump's tax reform bill narrowly passed the House of Representatives and was sent to the Senate for review. US Treasury yields pulled back from recent highs, and the US dollar rose on Thursday after three consecutive days of declines, with LME copper dropping slightly. On the fundamental side, from the supply side, warrant liquidation has been significant, but warehouse inventories have not decreased as expected. As of Thursday, May 22, SMM copper inventories in major regions across China increased slightly by 700 mt from Monday to 139,900 mt, up 7,900 mt from last Thursday, marking the second consecutive week of inventory buildup, though the buildup was less pronounced than the previous week. On the demand side, copper prices fell yesterday, leading to better trading at lower prices. Currently, low-priced supplies have been largely purchased, and it is expected that the center of the premium will struggle to rebound today. In terms of prices, with no more positive news in the market, it is expected that the upside potential for copper prices will be limited today.