The most-traded BC copper contract closed up 6.3%, as copper prices rose on support from precious metals [SMM BC Copper Review]

Today, the most-traded BC copper contract 2603 opened at 91,320 yuan/mt. At the beginning of the session, copper prices moved sideways and touched a low of 90,890 yuan/mt. After the daytime session opened, prices rose sharply to a high of 88,950 yuan/mt, and finally closed at 97,290 yuan/mt, up 6.3%. Open interest reached 6,125 lots, an increase of 1,002 lots from the previous trading day, while trading volume reached 14,547 lots, an increase of 8,871 lots. On the macro front, the US Fed kept interest rates unchanged at its January meeting, but room for interest rate cuts remained. US-Iran geopolitical tensions continued to escalate, with the US stepping up warnings. Iran’s military recently sent a clear signal: “Once national security is threatened, the Strait of Hormuz will be blocked.” Sentiment in the precious metals market warmed, with gold prices hitting a new high, and copper prices also rose on the boost. On the fundamentals side, supply remained loose, with increased arrivals of domestic material. Demand side, constrained by high copper prices, overall demand remained weak.

SHFE copper contract 2603 closed at 109,110 yuan/mt. Based on the BC copper contract 2603 price of 97,290 yuan/mt, its after-tax price is 109,938 yuan/mt. The price spread between SHFE copper 2603 and BC copper was -828, maintaining an inverted spread that widened from the previous day.