US October CPI Data Meets Expectations, Strong US Dollar Index Continues to Pressure Copper Prices [SMM Copper Morning Comment]

LME copper opened at $9,121.5/mt overnight, initially reaching a high of $9,142.5/mt before declining throughout the session. Near the close, it briefly rebounded but continued to fall, touching a low of $9,006/mt and finally closing at $9,007.5/mt, down 1.5%. Trading volume reached 30,000 lots, and open interest was 278,000 lots. The most-traded SHFE copper 2412 contract opened at 74,080 yuan/mt overnight, initially reaching a high of 74,430 yuan/mt before declining throughout the session and then touching a low of 73,720 yuan/mt. Near the close, it briefly rebounded and finally closed at 73,960 yuan/mt, down 0.98%. Trading volume reached 42,000 lots, and open interest was 152,000 lots. Macro side, the US October unadjusted CPI year-on-year rate was 2.6%, meeting market expectations and reaching a three-month high, ending a six-month decline. The US dollar index continued to rise, hitting a new high for the year, further pressuring copper prices. Several US Fed officials expressed uncertainty about the extent of interest rate cuts, indicating they would act more cautiously and might pause during the rate-cutting cycle. Fundamentally, as copper prices fell sharply, trading activity in the spot market picked up. Traders stood firm on quotes, and downstream purchasing sentiment was relatively positive, supporting an increase in spot premiums. Given the tight supply of domestic copper cathode, spot premiums are expected to remain firm today. Price side, uncertainty remains over whether the US Fed will cut interest rates in December. The market is waiting for upcoming economic data, with overall cautious sentiment prevailing. Copper prices are expected to fluctuate downward today.