BC Copper 2604 Closed Lower with a Wide Trading Range, Pressured by Both Geopolitics and Interest Rate Cut Expectations [SMM BC Copper Commentary]

Today, the most-traded BC copper 2604 contract opened at 89,640 yuan/mt and hit a high of 89,640 yuan/mt early in the session, then saw wide swings. After the daytime session opened, the center of copper prices slid straight down and dipped to 88,550 yuan/mt near the close, finally settling at 88,740 yuan/mt, down 0.68%. Open interest rose to 5,792 lots, up 119 lots from the previous trading day, and trading volume increased to 3,285 lots, indicating that bears added positions. From a macro perspective, the fallout from an attack on an oil tanker in the Gulf region continued to unfold, and Iran stated it might keep the Strait of Hormuz closed, sending crude oil prices higher. Safe-haven sentiment boosted the US dollar index, while the market also lowered expectations for US Fed interest rate cuts this year to 20 basis points; together, these factors weighed on copper prices. Fundamentals, supply side, structural divergence: inventory at high levels but warrants declined, and under delivery-driven logic, overall supply remained relatively loose. Supply was ample; demand side, downstream demand was gradually released.

The SHFE copper 2604 contract closed at 100,310 yuan/mt. Based on the BC copper 2604 contract at 88,740 yuan/mt, its after-tax price was 100,276 yuan/mt. The price spread between the SHFE copper 2603 contract and BC copper was 34, and the spread reverted to a contango structure.