Divergent U.S. Job Market Data, Dollar Index Rebounds, Copper Prices Slightly Under Pressure During the Week [SMM Macro Weekly Review]

LME copper and SHFE copper generally continued to fluctuate at highs in the doldrums this week, with the market center slightly lower. Earlier, the US Fed showed significant internal disagreement over a December interest rate cut, market expectations for a rate cut cooled, and the US dollar index continued its rebound, putting sustained pressure on copper prices.
US labour market data showed significant divergence: non-farm payrolls data unexpectedly increased, while the unemployment rate conversely rose to a four-year high, leading to thick wait-and-see sentiment in the market and an increased probability of expectations for no rate cut in December.

Fundamentally, copper concentrates offers increased compared to earlier this week, and spot market activity picked up. Antofagasta and Japanese smelters initiated long-term contract negotiations for 2026 copper concentrates mid-week. Domestically, inventory remained volatile; after the delivery of the SHFE copper 2511 contract, market premiums edged up slightly, but consumption still struggled to show an increase.

Looking ahead to next week, the US year-end interest rate cut path still lacks guidance from key data. The release of key US data such as October PCE and Q3 GDP will provide more clues. However, amid geopolitical influences, copper prices are more likely to rise than fall. LME copper is expected to fluctuate between $10,600-10,850/mt, and SHFE copper between 85,000-87,500 yuan/mt. On the spot side, with important long-term contract price negotiations for items like copper concentrates and copper cathode scheduled around the CESCO conference next week, the spot market is expected to be sluggish, but attention should be paid to the progress of long-term contract talks.