Copper prices inched lower as market awaiting more data guidance

LME copper prices opened at $8388/mt and closed at $8375/mt in overnight trading, a drop of 0.77%, with the low-end of $8353.5/mt and the high-end of $8400/mt. Trading volume was 13,000 lots and open interest stood at 266,000 lots. The most active SHFE 2401 copper contract prices opened at 68010 yuan/mt and closed at 67830 yuan/mt last evening, down 0.26%, with the high-end of 68010 yuan/mt and the low-end of 67740 yuan/mt. Trading volumes stood at 27,000 lots and open interest stood at 160,000 lots.

On the macro front, there were very few US data releases last night, and the market was waiting. European Central Bank President Christine Lagarde said overall inflation is likely to rise again in the coming months. On Fundamentals, as of Monday November 27, SMM copper inventories across major Chinese markets stood at 58,600 mt, up 1,600 mt from last Friday but still 55,400 lower than the same period last year. The decrease in the arrival of imported copper over the weekend in East China and some supplies being transferred to South China resulted in a decrease in inventory; in South China, due to the increase in shipments from surrounding refineries and the arrival of copper from the north, the supply of copper increased. However, production cuts occurred at downstream producers amid high premiums, resulting in an increase in overall inventories. In terms of consumption, high premiums still suppress downstream demand, and downstream consumers are expected to remain cautious. Copper prices are expected to remain rangebound as the market is cautious.