SHANGHAI, Mar 8 — LME copper closed at $8,732.5/mt overnight, a decline of 2.43%.Trading volume was 19,000 lots and open interest stood at 251,000 lots. The most active SHFE 2304 copper contract finished at 68,750 yuan/mt last evening, down 1.16%. Trading volume was 47,000 lots and open interest stood at 146,000 lots.
On the macro front, Federal Reserve Chairman Powell said that the Fed may raise interest rates more than previously expected, and warned that there is still a long way to go to bring the inflation rate back to 2%. The dollar jumped to a new high, weighing down copper prices.
In terms of fundamentals, contango of the SHFE front-month copper contract over the SHFE next-month copper contract expanded due to the approaching delivery, so sellers in east China raised their quotes. The low-price supply of goods in the market was quickly snapped up, and the supply of high-quality copper was relatively tight. In south China, due to weak consumption, the downstream purchasing enthusiasm was not strong against rising copper prices. The overall transaction was relatively quiet.
In terms of consumption, demand continued to recover in March. Although it was not as strong as expected, most downstream companies believe that orders will increase significantly in March. Copper prices fell due to the impact of the Fed's hawkish speech.
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