Overnight, LME copper opened at $10,460.5/mt, initially reaching a high of $10,481/mt and hitting a session low of $10,386.5/mt. It finally closed at $10,475/mt, with a decline of 0.56%. Trading volume reached 19,000 lots, and open interest was 347,000 lots. Overnight, the most-traded SHFE copper contract opened at 84,180 yuan/mt, initially hitting a session low of 84,070 yuan/mt then rebounding to a session high of 84,870 yuan/mt. It finally closed at 84,760 yuan/mt, with a decline of 0.18%. Trading volume reached 78,000 lots, and open interest was 205,000 lots.
On the macro front, the US Fed's Beige Book indicated that US economic activity continued to expand, but businesses are increasingly pessimistic about the economic outlook, expecting prices to continue to grow moderately in the near term. The US dollar index rebounded, pressuring copper prices. Additionally, BHP announced on Wednesday that it has no intention of making a formal offer to acquire Anglo American, abandoning a six-month-long acquisition plan. The State Council issued the "2024-2025 Energy Conservation and Carbon Reduction Action Plan," which gradually cancels restrictions on NEV purchases across regions and strictly controls the addition of new smelting capacities for copper and alumina. This may ease the tight supply of copper ore in the future.
On the fundamentals, supply arrivals increased, but on the consumption side, downstream purchasing interest remained low as copper prices continued to rise yesterday, keeping consumption subdued. The strong performance of the US dollar index exerted some pressure on copper prices. Meanwhile, BHP's abandonment of the acquisition and the domestic re-emphasis on controlling new smelting capacities may ease the sentiment of copper ore shortages to some extent. Copper prices are expected to remain at high levels without significant rebounds.
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