Cooling rate hike expectations keep copper prices steady overnight [SMM Copper Morning Comment]

SMM, September 30: Overnight, LME copper closed lower while SHFE copper closed higher, both showing long liquidation. Macro sentiment was disrupted by US Fed monetary policy expectations, and copper prices are expected to stay high and move sideways today

 1. Overnight futures

LME copper: Opened at $14,426/mt, hit a high of $14,483/mt, a low of $14,399.5/mt, and closed at $14,425.5/mt, down 0.36%. Trading volume was 17,000 lots, and open interest was 258,000 lots, down 1,360 lots from the previous trading day, with long liquidation.

The most-traded SHFE copper 2611 contract: Opened at 109,280 yuan/mt, hit a high of 109,790 yuan/mt, a low of 109,280 yuan/mt, and closed at 109,420 yuan/mt, up 0.11%. Trading volume was 23,000 lots, and open interest was 184,000 lots, down 975 lots from the previous trading day, with long liquidation.

2. Macro front

Several US Fed officials made statements on monetary policy. New York Fed President Williams said there may be one more rate hike this year, but there is no need to rush, and the dovish tone cooled market rate hike expectations. The market is focused on this week's PCE inflation data and the US employment report for guidance on the year-end rate decision.

3. Fundamentals

Supply side, arrivals of both domestic and imported cargoes increased, easing the tightness in spot circulation. Demand side, pre-holiday new purchasing demand was weak, and high premiums further suppressed buying interest, leaving market trading sluggish.