BC Copper Fluctuated Lower and Closed Down on Weak Year-End Demand [SMM BC Copper Review]

Today, the most-traded BC copper 2602 contract opened at 84,430 yuan/mt. It fluctuated considerably at the start of the session, climbed to 84,630 yuan/mt after the daytime opening, then fluctuated downward to touch a low of 83,940 yuan/mt, and finally closed at 84,220 yuan/mt, down 0.34%. Open interest fell to 3,232 lots, a decrease of 594 lots from the previous trading day, while trading volume reached 4,528 lots. On the macro front, the phenomenon of zero copper concentrate TCs for long-term contracts intensified concerns about a supply deficit. Additionally, US Fed Governor Milan urged continued interest rate cuts but indicated the necessity for a 50-basis-point cut had diminished, boosting market expectations for a rate cut in January. On the fundamentals, supply side, arrivals of imported and domestic material remained stable; demand side, downstream procurement demand was weak approaching year-end.

The SHFE copper 2601 contract closed at 93,740 yuan/mt. Based on the BC copper 2601 contract price of 84,220 yuan/mt, its post-tax price is 95,168 yuan/mt, resulting in a price spread of -1,428 between the SHFE copper 2601 contract and BC copper. The spread remained inverted and narrowed from the previous day.