》Check SMM Copper Quotes, Data, and Market Analysis
》Subscribe to View SMM Historical Spot Metal Prices
》Click to Access the SMM Copper Industry Chain Database
SMM, January 17:
In terms of macroeconomics, the US December CPI YoY growth rate rebounded mildly to 2.9%, while core CPI YoY growth rate unexpectedly pulled back to 3.2%. The US dollar index rose to 110 points at the beginning of the week before gradually pulling back to around 109 points. Long-term US Treasury yields dropped significantly, providing short-term upward momentum for copper prices. The US Beige Book indicated strong employment and encouraging progress on inflation. Data released on Wednesday showed that a key measure of underlying inflation slowed for the first time in six months. LME copper rose from around $9,100/mt to approximately $9,250/mt during the week. In China, data released by the National Bureau of Statistics (NBS) showed that domestic GDP grew by 5.0% YoY in 2024, with Q4 consumption showing signs of recovery and the effects of stimulus policies becoming evident. Fundamentals showed a steady improvement. SHFE copper rose from 75,000 yuan/mt to 76,000 yuan/mt during the week.
In terms of foreign trade, the import arbitrage window closed this week as previous exchange rate fluctuations were gradually smoothed out. However, the price spread between the Comex most-traded contract and the LME 0-3M contract remained high. Since this price spread was not caused by inventory factors, there were no significant cargo movements on the Asia-North America route. With the Chinese New Year approaching, few transactions were reported for late January arrivals, with most inquiries focusing on early February arrivals. Due to the widening SHFE/LME price ratio, buyers and sellers faced significant disagreements. LME Asian warehouses continued to see large-scale warehouse warrant cancellations this week, but the contango structure of the 0-3M contract showed no significant fluctuations. Some previously canceled cargoes have already entered the country. With bonded zone inventory remaining at low levels, some downstream players also sourced from LME warehouses at lower prices to prepare for domestic inventory needs. Regarding EQ, scattered offers were reported for mid-to-early February arrivals, but actual transactions were significantly impacted by the deteriorating SHFE/LME price ratio. Additionally, SMM learned that some major players have shipped cargoes to North America, with an estimated in-transit volume of 20,000 mt.
In the domestic market, since January, the high spot premiums in domestic trade have eased. After the delivery of the SHFE copper 2401 contract, spot premiums pulled back slightly, and rising copper prices dampened some downstream pre-holiday restocking sentiment. Overall, domestic consumption slowed as logistics halted and enterprise orders weakened.
Looking ahead to next week, the overseas macro environment is expected to remain quiet, with the market anticipating follow-up tariff policies after Trump takes office. Meanwhile, the Bank of Japan will announce its interest rate decision next week, and the US dollar index faces some resistance above. LME copper is expected to fluctuate within the range of $9,200-9,350/mt, while SHFE copper is expected to move between 75,500-76,500 yuan/mt. In the spot market, as the countdown to the Chinese New Year holiday begins, the spot market is expected to gradually quiet down. Spot prices against the SHFE copper 2501 contract are expected to remain at premiums of 50-120 yuan/mt.
