Copper Morning Comment

LME copper prices opened at $8475.5/mt and closed at $8455/mt overnight, a rise of 0.41%, with the low-end of $8427/mt and the high-end of $8489/mt. Trading volume was 15,000 lots, and open interest stood at 296,000 lots. The most active SHFE 2404 copper contract prices opened at 68630 yuan/mt and finished at 68700 yuan/mt overnight, with the high-end of 68720 yuan/mt and the low-end of 68580 yuan/mt, up 0.25%. Trading volume was 17,000 lots, and open interest stood at 150,000 lots.
On the macro front, Fed officials unanimously stated that they need to consider data before considering an interest rate cut later this year. U.S. fourth-quarter GDP growth was revised down to 3.2% from 3.3%. The key PCE data in the United States will be released today. If it is close to the inflation target, it will help the Federal Reserve cut interest rates as soon as possible. The data will then provide guidance for copper prices. In terms of fundamentals, from the supply side, imported copper has gradually arrived in Hong Kong to replenish stocks, and the supply has increased to a certain extent. In terms of consumption, traders have a need to withdraw funds at the end of the month and sell goods at low prices. The actual transaction price is lower, and downstream companies take advantage of low prices to replenish their stocks. However, the overall consumption situation in the downstream has not seen a significant improvement, and the operating rate has yet to recover. Overall, supply has increased and downstream companies have taken advantage of dips to replenish their inventories, but the actual increase in consumption is less than expected, and downstream companies are waiting for copper prices to continue to fall. In terms of price, on the whole, Federal Reserve officials emphasized that it is not advisable to cut interest rates prematurely to suppress copper prices. The domestic market has not yet recovered. It is expected to remain low and volatile before the release of PCE data. If the data is released, if it is close to the inflation target, it is expected to form support for copper prices.