The Most-Traded BC Copper Contract Closed Up 3.61%, Spot Supply Tight, Pre-Holiday Demand Weak [SMM BC Copper Review]

Today, the most-traded BC copper contract 2603 opened at 92,930 yuan/mt, fluctuating considerably at the start of the session. During daytime trading, it immediately touched a high of 93,770 yuan/mt, after which the center of copper prices gradually shifted downward, probing a low of 92,080 yuan/mt, then fluctuated upward and finally closed at 93,200 yuan/mt, a gain of 3.61%. Open interest reached 5,624 lots, down 222 lots from the previous trading day, while trading volume reached 88.05 million lots, showing a reduction in bear positions. From a macro perspective, Trump's plan to introduce a strategic reserve for critical minerals, coupled with a proposal from the Nonferrous Metals Association to include copper and copper concentrates in the reserve allocation, provided upward momentum for copper prices. At the same time, Trump signed a bill to end the partial US government shutdown, easing some market uncertainty. On the fundamentals, supply side, spot supply of copper cathode narrowed overall during the day, with limited spot cargo resources available in the market, and some brands held in warrant form. Supply side, spot circulation resources for copper cathode were tight, and available supply for sale narrowed, with some brands existing as warrants. Demand side, affected by the rebound in copper prices and the approaching Chinese New Year holiday, overall performance was weak.

SHFE copper contract 2603 closed at 105,160 yuan/mt. Based on the BC copper contract 2603 price of 93,200 yuan/mt, its after-tax price is 105,316 yuan/mt, resulting in a price spread of -156 between SHFE copper 2603 and BC copper. The spread remained inverted and continued to widen.