Hawkish speech suppresses copper prices, the market awaits key inflation data [SMM Copper Morning Comment]

LME copper prices opened at $8341/mt and closed at $8391/mt in overnight trading, a rise of 0.74%, with the low-end of $8320/mt and the high-end of $8399/mt. Trading volume was 25,000 lots, and open interest stood at 280,000 lots. The most active SHFE 2402 copper contract prices opened at 68010 yuan/mt and closed at 67920 yuan/mt last evening, down 0.01%, with the high-end of 68110 yuan/mt and the low-end of 67670 yuan/mt. Trading volumes stood at 17,000 lots and open interest stood at 121,000 lots. On the macro front, Fed official Williams said that policy restrictions should be relaxed only when it is convinced that the inflation rate is continuing to move toward 2%, dampening market expectations of interest rate cuts and putting pressure on copper prices. We need to pay attention to the US CPI data released today, as expectations for interest rate cuts may become clearer. In terms of fundamentals, from the supply side, a large amount of imported copper flows into domestic trade market, consumption recovery is limited, and the overall supply is relatively ample. However, there is room for arbitrage between Shanghai and Guangdong, and supply may goods flow into Guangdong, which may change the supply pattern. In terms of consumption, copper prices also dropped to new lows as premiums fell. Downstream consumption has picked up to a certain extent. If copper prices and premiums remain stable, active consumption is expected to be sustainable. In terms of price, the Federal Reserve's reappearance of "hawkish" speech dampened expectations of interest rate cuts, and copper prices are expected to be under certain pressure.