SMM Copper Morning Comment: Copper prices fell overnight, market waited for more data guidance

LME copper prices opened at $8528.5/mt and closed at $8524.5/mt last evening, down 1.06%, with the high-end of $8572/mt and the low-end of $8508.5/mt. Trading volume was 19,000 lots and open interest stood at 283,000 lots. The most active SHFE 2403 copper contract prices opened at 69030 yuan/mt and finished at 68890 yuan/mt last evening, down 0.76%, with the low-end of 68790 yuan/mt and the high-end of 69190 yuan/mt. Trading volume was 22,000 lots, and open interest stood at 146,000 lots. On the macro front, market sentiment was affected by previous statements by Federal Reserve officials, which increased expectations for a delay in interest rate cuts. The market is waiting for more data guidance to judge the path of the Fed's monetary policy. In terms of fundamentals, from the supply side, since long-distance logistics and freight will stop next week, some downstream companies will concentrate on stocking this week and some warehouse receipts were delivered, resulting in a reduction in spot supply. That gave some support to spot prices. In terms of consumption, most downstream companies will complete stocking this week, and overall demand will continue to weaken before the holiday. In addition, according to SMM research, as of Thursday, February 1, SMM copper inventories in mainstream regions in China increased by 10,300 tons from Monday to 102,300 tons, accumulating stocks for three consecutive weeks, with total inventories 161,600 tons lower compared with the same period last year. In terms of price, consumption is weakening as the CNY holidays approaches, and it is expected that copper prices will have little growth momentum.