BC copper fluctuated downward, with macro fundamentals suppressing the narrowing of price spread [SMM BC copper commentary]

Today, the most-traded BC copper 2508 contract opened at 69,340 yuan/mt and closed in the red, with bears increasing their positions. During the night session, the most-traded BC copper contract fell to an intraday low of 69,200 yuan/mt at the beginning of trading, then fluctuated considerably. After the day session opened, the center of copper prices gradually moved up, touching a high of 69,750 yuan/mt, before fluctuating downward and eventually closing at 69,540 yuan/mt, a decline of 0.3%. Open interest reached 4,310 lots, an increase of 12 lots from the previous trading day, and trading volume reached 3,886 lots. From a macro perspective, market sentiment was significantly disrupted by uncertainties in trade policies. Trump's proposal to impose a 30% tariff on Mexico and the EU led to a noticeable increase in the risk of uncertainties in global trade policies. Meanwhile, Fed official Goolsbee also warned that such tariff threats could drive up inflation, curb the economy, and thus delay the interest rate cut process that the market was expecting, causing copper prices to fall under pressure. On the fundamental side, LME copper inventories increased by 900 mt to 109,625 mt. As of Monday, SMM's nationwide mainstream copper inventories increased by 3,900 mt to 147,600 mt, with the supply side being relatively looser compared to before. The performance on the demand side was differentiated with price fluctuations. During the copper price correction phase, some downstream enterprises restocked at low prices, driving a phased release of demand. However, as copper prices stopped falling and rebounded, downstream purchasing sentiment quickly shifted to a wait-and-see attitude, with restocking willingness falling to a low level, and the support from the demand side weakened.

The most-traded SHFE copper 2508 contract closed at 78,400 yuan/mt. If based on the most-traded BC copper 2508 contract price of 69,540 yuan/mt, its after-tax price would be 78,580 yuan/mt. The price spread between the SHFE copper 2508 contract and the BC copper contract was -180, maintaining an inversion and narrowing compared to the previous day.