BC copper prices fluctuated and closed higher, with the price spread between SHFE copper and BC copper narrowing [SMM BC Copper Commentary]

Today, the most-traded BC copper 2509 contract opened at 69,530 yuan/mt and closed with a positive daily candle. During the night session, the most-traded BC copper 2509 contract initially fluctuated considerably, dipping to 69,490 yuan/mt. After the day session opened, the center of copper prices gradually moved up, touching an intraday high of 69,790 yuan/mt, and finally closed at 69,750 yuan/mt, with a gain of 0.55%. The open interest reached 4,727 lots, a decrease of 29 lots from the previous trading day, and the trading volume reached 2,744 lots. On the macro front, US Fed's Daly said that the timing for an interest rate cut is approaching and that there is a higher likelihood of more than two interest rate cuts this year. Goldman Sachs predicts that the US Fed will cut interest rates by 25 basis points three consecutive times starting from September and points out that if the unemployment rate rises, it may cut interest rates by 50 basis points. The strengthening expectations for US Fed interest rate cuts have boosted copper prices. On the fundamental side, on the supply side, LME copper inventories increased by 14,275 mt to 153,850 mt, with a significant increase and a cumulative trend over several consecutive days, alleviating concerns about tight supply to a certain extent. However, the current inventory level is still in the lower-middle range compared to the same period in history, and the pressure on copper prices has not fully manifested yet. On the demand side, downstream demand weakened due to off-season factors.

The SHFE copper 2509 contract closed at 78,580 yuan/mt. If we consider the most-traded BC copper 2509 contract at 69,750 yuan/mt, its after-tax price is 78,817 yuan/mt. The price spread between the SHFE copper 2509 contract and the BC copper contract is -33, maintaining an inverted spread and narrowing compared to the previous day.