US November PCE Data Cooled Across the Board, Copper Prices Edged Up Last Friday Night [SMM Copper Morning Comment Dec 23]

Last Friday night, LME copper opened at $8,892.5/mt, dipped to $8,880.5/mt at the beginning of the session, then fluctuated upward, reaching a high of $8,953.5/mt near the session's end, and finally closed at $8,944/mt, up 0.66%. Trading volume reached 13,000 lots, and open interest stood at 262,000 lots. Meanwhile, the most-traded SHFE copper 2501 contract opened at 73,650 yuan/mt, dipped to 73,580 yuan/mt at the beginning of the session, fluctuated rangebound, then moved higher and fluctuated upward, reaching a high of 73,950 yuan/mt near the session's end, and finally closed at 73,940 yuan/mt, up 0.28%. Trading volume reached 16,000 lots, and open interest stood at 110,000 lots. Macro side, data released last Friday showed that US November PCE data cooled across the board. The November PCE price index annual rate recorded 2.40%, below the expected 2.50% and the previous value of 2.30%; the monthly rate recorded 0.10%, below the expected 0.20% and the previous value of 0.20%. Market expectations for further interest rate cuts by the US Fed warmed up, and the US dollar index pulled back from a two-year high, supporting copper prices. Fundamentally, supply side, concentrated arrivals of imported copper led some suppliers to sell at low prices, increasing spot copper cathode supply. However, on the consumption side, stocking demand over the weekend did not materialize significantly, and market transactions were sluggish. Domestic inventory is expected to resume building this week, which will put pressure on spot premiums. In terms of prices, the US dollar index remains at a high level, weighing on copper prices. Copper prices are expected to have limited upside today.