Inflation heating up interwoven with geopolitical easing, copper prices continue to consolidate at highs [SMM Copper Morning Comment]

SMM, Sept 14: Last Friday evening, LME copper opened at $14,088/mt. After the open, it rose to a high of $14,359/mt, then consolidated and pulled back, and finally closed at $14,226/mt, up 0.31%. Trading volume reached 27,000 lots, and open interest reached 275,000 lots, an increase of 2,022 lots from the previous trading day, indicating that bulls added positions. Last Friday, the most-traded SHFE copper 2610 contract opened at 108,660 yuan/mt. It rose to a high of 108,830 yuan/mt in early trading, then drifted lower to a low of 108,350 yuan/mt, and finally closed at 108,440 yuan/mt, down 0.50%. Trading volume reached 37,000 lots, and open interest reached 193,000 lots, down 5,979 lots from the previous trading day, indicating that bulls reduced positions. On the macro front, the US August core CPI MoM exceeded expectations, and expectations for US Fed interest rate hikes in September heated up again. On the geopolitical front, Iran was set to meet with Gulf countries, coupled with a ceasefire on the west coast of the Red Sea, releasing signals of easing tensions in the Middle East. With macro bullish and bearish factors intertwined, the US dollar index quickly pulled back after a short-term surge, and copper prices overall continued to consolidate at highs. On the fundamentals front, supply side, arrivals of domestic copper and imported cargo increased, and spot supply improved somewhat, but the overall market still stayed tight; demand side, downstream buy the dip increased somewhat, but overall demand was still mainly driven by rigid demand. Overall, copper prices are expected to consolidate at highs today.