LME spot cargo remains low, while BC copper shows an upward trend [SMM BC copper commentary]

Today, the most-traded BC copper 2508 futures contract opened at 71,710 yuan/mt, closing the day with a positive candlestick, indicating an increase in long positions. During the night session, the most-traded BC copper futures contract initially touched a high of 72,140 yuan/mt. Subsequently, the center of copper prices gradually shifted downward, reaching an intraday low of 71,560 yuan/mt. During the day session, prices fluctuated considerably before finally closing at 71,760 yuan/mt, up 480 yuan/mt from the previous close, representing a 0.67% increase. Open interest reached 5,792 lots, an increase of 29 lots from the previous trading day, with trading volume reaching 4,380 lots. On the macro front, although Fed Chairman Powell did not make a clear commitment to an interest rate cut in July, his statement that "a rate cut is not ruled out" broke with the previous hawkish stance, significantly increasing short-term bets on a dovish policy. If the Fed subsequently implements an interest rate cut, the attractiveness of US dollar-denominated assets will be weakened, and investors will be more inclined to shift their funds to other asset classes with higher returns, leading to a low US dollar index and bullish copper prices. On the fundamental front, although LME inventory saw a slight rebound today, increasing by 2,000 mt to 93,250 mt, market sentiment eased but spot inventory remained at a low level, providing support to copper prices.

The most-traded SHFE copper 2508 futures contract closed at 80,540 yuan/mt. If we consider the most-traded BC copper 2508 futures contract price of 71,760 yuan/mt, its after-tax price is approximately 81,089 yuan/mt. The price spread between the SHFE copper 2508 futures contract and the BC copper futures contract is -549, with the inverted spread narrowing compared to the previous day.