News of refinery production cuts boosted copper prices [SMM Copper Morning Comment]

LME copper prices opened at $8670.5/mt and closed at $8920/mt last evening, up 3.14%, with the highest of $8950/mt and the lowest of $8638.5/mt.Trading volume was 48,000 lots, and open interest stood at 289,000 lots. The most active SHFE 2405 copper contract prices opened at 71200 yuan/mt and finished at 71950 yuan/mt overnight, with the high-end of 72200 yuan/mt and the low-end of 71080 yuan/mt, up 2.74%. Trading volume was 105,000 lots, and open interest stood at 205,000 lots. On the macro front, as the recent TCs dropped to an ultra-low level in 10 years, the China Nonferrous Metals Association yesterday convened a meeting of domestic mainstream refineries to discuss countermeasures. Sources revealed that smelters may have plans to reduce production. Therefore, copper prices were significantly boosted to the highest level in 11 months. In addition, the State Council issued the "Action Plan for Promoting Large-Scale Equipment Updates and Trade-in of Consumer Goods" to promote consumption, stimulate investment and increase advanced production capacity. That supported copper prices. In terms of fundamentals, from the supply side, arrivals have decreased, warehouse receipts held by sellers have increased, and spot supply has been compressed to a certain extent. In terms of consumption, copper prices surged, and downstream purchases were on demand. The seasonal recovery pace is slow. Overall, inventories have declined, but supply remains loose. Taken together, the news of domestic refinery production cuts has significantly boosted copper prices. It is expected that copper prices will have support.