The most-traded BC copper contract rose 0.03%, with dual tailwinds from geopolitics and supply resonating. [SMM BC Copper Review]

Today, the most-traded BC copper contract 2602 opened and bottomed at 88,470 yuan/mt. The night session was closed due to the New Year holiday. During the daytime session, copper prices opened higher and the price center gradually moved up, approaching 90,700 yuan/mt near the close, eventually settling at 90,830 yuan/mt, a gain of 3.03%. Open interest reached 7,892 lots, an increase of 678 lots from the previous trading day, while trading volume reached 7,466 lots, indicating long position building. On the macro front, the US took military action against Venezuela and Saudi Arabia launched another airstrike on Yemen, escalating geopolitical risks. Combined with frequent mine-side accidents raising supply concerns, these factors collectively supported copper prices. On the fundamentals, supply side, arrivals of domestic material increased, while arrivals of imported material remained tight; demand side, post-holiday market purchasing sentiment showed marginal recovery. Inventory side, as of January 5 (Monday), SMM nationwide copper inventories in mainstream areas increased 7.83% WoW and rose 151,900 mt YoY.

The most-traded SHFE copper contract 2602 settled at 101,350 yuan/mt. Based on the BC copper contract 2602 price of 90,830 yuan/mt, its post-tax price is 102,637 yuan/mt. The price spread between SHFE copper contract 2602 and BC copper was -1,287, maintaining an inverted spread which widened compared to the previous day.