SMM Copper Morning Comment

LME copper prices opened at $8308.5/mt and closed at $8370/mt in overnight trading, a gain of 1.49%, with the low-end of $8291/mt and the high-end of $8371.5/mt. Trading volume was 20,000 lots, and open interest stood at 285,000 lots. The most active SHFE 2401 copper contract prices opened at 67530 yuan/mt and finished at 67670 yuan/mt overnight, up 0.13%, with the low-end of 67490 yuan/mt and the high-end of 67770 yuan/mt. Trading volume was 19,000 lots and open interest stood at 148,000 lots. On the macro front, as of December 2, the number of initial jobless claims in the United States rose to 220,000, slightly lower than the expected 222,000. In addition, data released on Thursday showed that China's exports increased for the first time in six months in November, which stimulated market sentiment to a certain extent. The market is awaiting the upcoming non-farm payrolls report to further confirm the Fed's subsequent moves. In terms of fundamentals, as the price spread between front-month and next-month contracts continued to expand in East China yesterday, premiums and discounts fell. Downstream purchasing enthusiasm picked up. It is expected that the spot prices will unlikely continue to decline; South China was also affected by the high price spread between front-month and next-month contracts. Due to the decline in local inventory, cargo holders wanted to raise prices, but downstream acceptance was not high. In terms of consumption, both the SHFE copper price and premiums and discounts declined, which has stimulated spot demand to a certain extent. It is expected that demand will be stronger in the near future. The fundamentals will support copper prices.