SMM Copper Morning Comment: SHFE coper prices fell, Fed kept interest rate unchanged

LME copper prices opened at $8907.5/mt and closed at $8990/mt in last evening trading, a gain of 0.2%, with the low-end of $8895/mt and the high-end of $8995/mt. Trading volume was 21,000 lots, and open interest stood at 310,000 lots. The most active SHFE 2405 copper contract prices opened at 72230 yuan/mt and finished at 72390 yuan/mt last evening, down 0.32%, with the low-end of 72160 yuan/mt and the high-end of 72600 yuan/mt. Trading volume was 43,000 lots, and open interest stood at 216,000 lots. On the macro front, interest rate cut bets have heated up again after the release of the Federal Reserve's interest rate decision, and the U.S. dollar index has accelerated its decline, which is good for copper prices. In addition, the dot plot shows that the Federal Reserve will maintain its expectation of cutting interest rates three times this year. Domestically, the People's Bank of China kept the one-year and five-year LPR unchanged at 3.45% and 3.95% respectively. In terms of fundamentals, from the supply side, most of the imported copper that flowed into domestic trade market has been consumed. A new batch of imported copper will flow in at the end of the week, which is expected to lower the spot premiums. In terms of consumption, copper prices fluctuated greatly, and downstream purchases are cautious, focusing on on-demand purchases. It is expected that under the current high copper prices, it is difficult to see a significant increase in demand. Copper prices are expected to rise.