SHFE Copper BC Copper 2512 Contract Fluctuated and Closed Higher, Tightened Supply Coupled with Interest Rate Cut Expectations Provide Support [SMM BC Copper Review]

Today, the most-traded BC copper 2512 contract opened at 77,760 yuan/mt, touched a high of 77,990 yuan/mt early in the session, then fluctuated downward to a low of 77,500 yuan/mt, before fluctuating upward. After the daytime session opened, it fluctuated considerably and finally closed at 77,780 yuan/mt, up 0.7%. Open interest fell to 2,086 lots, down 383 lots from the previous trading day, while trading volume reached 3,552 lots. On the macro front, the latest US initial jobless claims data showed some easing of labour market pressure, but the US Fed Beige Book disclosed recent mediocre performance in US economic activity and intensified polarization in consumption. Market expectations for further interest rate cuts by the US Fed continued to heat up, providing support for copper prices. On the fundamentals side, supply side, arrivals of both imported and domestic copper resources decreased. Demand side, affected by rising copper prices, downstream purchasing sentiment turned cautious. Inventory side, as of Thursday, November 27, SMM copper inventories in mainstream regions across China fell 7,100 mt from Monday to 173,500 mt.

The most-traded SHFE copper 2512 contract closed at 86,930 yuan/mt. Based on the BC copper 2512 contract price of 77,780 yuan/mt, its after-tax price is 87,891 yuan/mt, resulting in a price spread of -961 between the SHFE copper 2512 contract and BC copper. The spread remained inverted and widened compared to the previous day.