SMM Copper Morning Comment

LME copper prices opened at $8530/mt and closed at $8515/mt in overnight trading, a drop of 0.21%, with the low-end of $8455/mt and the high-end of $8532/mt. Trading volume was 22,000 lots, and open interest stood at 279,000 lots. The most active SHFE 2402 copper contract prices opened at 68350 yuan/mt and finished at 68600 yuan/mt overnight, with the high-end of 68680 yuan/mt and the low-end of 68220 yuan/mt, down 0.03%. Trading volume was 30,000 lots, and open interest stood at 133,000 lots. On the macro front, the minutes of the Federal Reserve meeting were overall dovish, but they downplayed the sense of urgency to cut interest rates compared to before. The market expects that interest rates will remain at their peak for longer. The U.S. ISM manufacturing PMI picked up in December, and the U.S. dollar index also continued to rise, which generally has a suppressive effect on copper prices. In terms of fundamentals, from the supply side, a large amount of imported copper flowed into the domestic trade market yesterday, driving premiums lower. However, actual trading volume was low, consumption of inventories was weak, and supply is expected to remain relatively ample. In terms of consumption, due to the large fluctuations in premiums and the fact that downstream consumption has not yet recovered, the supply is relatively ample. The downstream generally remained bearish and cautious, and only purchased on demand. The actual trading situation was lacklustre. The copper prices will meet resistance as the US dollar index rose.