Copper prices closed higher as dollar fell [SMM copper morning comment]

LME copper prices opened at $9875/mt and closed at $9950/mt overnight, up 0.48%, with the lowest of $9854.5/mt. Trading volume was 19,000 lots, and open interest stood at 333,000 lots. The most active SHFE 2407 copper contract prices opened at 79940 yuan/mt and finished at 80100 yuan/mt last evening, up 0.21%, with the low-end of 79740 yuan/mt and the high-end of 80190 yuan/mt. Trading volume was 30,000 lots, and open interest stood at 176,000 lots. On the macro level, the number of initial jobless claims in the United States for the week ending May 4 was 231,000, the highest since August 2023. The cooling of the labor market caused the US dollar to fall. Federal Reserve official Daly said that if the labor market continued to deteriorate, interest rate cuts could be considered. Copper prices closed higher overnight. In addition, in terms of the geopolitical situation, the ceasefire negotiations in Gaza broke down again. Both Hamas and Israeli delegations have left Cairo. The leader of the Houthi armed forces said he would respond to Israel's invasion of Rafah, and the conflict re-emerged. In terms of fundamentals, from the supply side, there will be a certain inflow of imported copper due to the improved SHFE/LME price ratio, and the supply will grow. In terms of consumption, copper prices fluctuated higher, which dampened downstream purchasing enthusiasm, and the market maintained on-demand purchasing. Smelters exported and restocked inventories after the Labour Day holiday. As of Thursday May 9, SMM copper inventories in mainstream markets in China decreased by 2,500 tons from Monday to 402,200 tons. On the whole, the cooling of the labor market has led to expectations of a rate cut by the Federal Reserve. Due to the decline of the US dollar, copper prices are expected to remain high.