China-US Trade Talks and Expectations for US Fed Interest Rate Cut Drive BC Copper 2511 to Close Up 0.82% [SMM BC Copper Review]

Today, the most-traded BC copper 2511 contract opened at 75,110 yuan/mt and closed higher intraday. During the night session, BC copper initially touched a low of 74,990 yuan/mt, after which copper prices fluctuated upward, approaching a high of 76,490 yuan/mt near the close, and finally settled at 75,870 yuan/mt, up 620 yuan with a gain of 0.82%. Open interest decreased by 88 lots to 4,410 lots, while trading volume increased by 3,071 lots to 11,310 lots compared to the previous trading day. On the macro front, China and the US held a video call on trade issues, with both sides expected to engage in a new round of trade consultations, easing market concerns. Additionally, the US Fed's Mutharlem signaled further interest rate cuts, boosting expectations for a Fed rate cut and supporting copper prices. On the fundamentals side, both imported and domestic supplies were replenished, while consumption remained dominated by just-in-time procurement. As of October 20, SMM domestic copper cathode inventories increased by 9,100 mt to 185,600 mt WoW.

The most-traded SHFE copper 2511 contract settled at 85,380 yuan/mt. Based on the BC copper 2511 contract price of 75,870 yuan/mt, its post-tax price is 85,733 yuan/mt, resulting in a price spread of -353 yuan/mt between the SHFE copper 2511 contract and the BC copper contract. The spread remained inverted and widened compared to the previous day.