SHANGHAI, October 31(SMM) –LME copper opened at $8190/mt on Monday, with its session low and high at $8107.5/mt and $8231/mt before closing up 0.59% at $8138.5/mt. Trading volume was 42,000 lots, and open interest was 269,000 lots. SHFE 2312 copper contract opened at 67810 yuan/mt overnight, with its session high and low at 67830 yuan/mt and 67230 yuan/mt before closing up 0.16% at 67390 yuan/mt. Trading volume was 38,000 lots, and open interest was 158,000 lots.
On the macro front, Germany’s initial adjusted CPI annual rate in October was 3%, the lowest since June 2021. Germany's inflation rate slowed down significantly in October, and the effects of the European Central Bank's interest rate hikes began to show. Germany's third-quarter GDP shrank by 0.1% from the initial estimate. The U.S. Treasury Department cut its Q4 borrowing forecast to $776 billion. This contrasts with recent data showing a rapidly widening fiscal deficit. In terms of fundamentals, as of Monday October 30, copper stocks in mainstream areas of China decreased by 9,100 mt from last Friday to 58,900 mt, a new low this year, and 33,000 mt lower than the same period last year. The recent downstream operating rates in East China are at a high level during the year, and smelters have increased shipments directly to downstream buyers, so inventories have dropped significantly. Although inventories in South China have also continued to decline, the decline has slowed down. In terms of consumption, rising copper prices and tightening cash flows towards the end of the month, may dent demand. In terms of price, the market expects that the Fed to suspend interest rate hikes, allowing copper prices to rebound slightly.
On the macro front, Germany’s initial adjusted CPI annual rate in October was 3%, the lowest since June 2021. Germany's inflation rate slowed down significantly in October, and the effects of the European Central Bank's interest rate hikes began to show. Germany's third-quarter GDP shrank by 0.1% from the initial estimate. The U.S. Treasury Department cut its Q4 borrowing forecast to $776 billion. This contrasts with recent data showing a rapidly widening fiscal deficit. In terms of fundamentals, as of Monday October 30, copper stocks in mainstream areas of China decreased by 9,100 mt from last Friday to 58,900 mt, a new low this year, and 33,000 mt lower than the same period last year. The recent downstream operating rates in East China are at a high level during the year, and smelters have increased shipments directly to downstream buyers, so inventories have dropped significantly. Although inventories in South China have also continued to decline, the decline has slowed down. In terms of consumption, rising copper prices and tightening cash flows towards the end of the month, may dent demand. In terms of price, the market expects that the Fed to suspend interest rate hikes, allowing copper prices to rebound slightly.
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