SMM Copper morning comment

LME copper prices opened at $8416.5/mt and closed at $8397/mt in overnight trading, a gain of 0.24%, with the low-end of $8389/mt and the high-end of $8423.5/mt. Trading volume was 10,000 lots, and open interest stood at 264,000 lots. The most active SHFE 2401 copper contract prices opened at 67900 yuan/mt and finished at 68020 yuan/mt last evening, up 0.4%, with the low-end of 67830 yuan/mt and the high-end of 68100 yuan/mt. Trading volume was 21,000 lots, and open interest stood at 156,000 lots.

On the macro front, the preliminary manufacturing PMI value of the Eurozone in November was recorded at 43.8, a six-month high. Germany's preliminary manufacturing PMI value in November was recorded at 42.3, a six-month high. The minutes of the ECB meeting stated that members advocated leaving the door open for possible further interest rate increases, but further interest rate increases are not part of the current baseline expectations. In terms of fundamentals, yesterday's rise in premiums and discounts in East China was mainly due to the continuous restarting of furnaces by surrounding processing companies. This, coupled with the drop in intraday copper prices, boosted procurement. However, the supply of goods from the north to the south suppressed premiums and discounts; South China's inventory has been suppressed for three consecutive days. The decline is mainly due to the low arrival of goods. Both copper prices and inventories fell yesterday. However, downstream faced high premiums and shut down furnaces. The sellers lowered the premiums, but the overall price was still at a high level. In terms of consumption, spot quotes in East China decreased and demand will grow. Copper prices are expected to remain rangebound.