SMM Copper Morning Comment

LME copper prices opened at $8621/mt and closed with a gain of 0.12% at $8596/mt last evening, with the low-end of $8549.5/mt and the high-end of $8621/mt. Trading volume stood at 16,000 lots. Open interest stood at 282,000 lots. The most active SHFE 2401 copper contract prices opened at 68750 yuan/mt and finished at 68850 yuan/mt overnight, down 0.12%, with the low-end of 68680 yuan/mt and the high-end of 68990 yuan/mt. Trading volume was 15,000 lots and open interest stood at 120,000 lots. On the macro front, the market is worried that the actions of Houthi militants will lead to tense international situations and trade disruptions, and the market has strong risk aversion. In addition, British inflation fell sharply, the pound fell, and the U.S. index rose, limiting the rise in copper prices. In terms of fundamentals, from the supply side, the current supply is tight in both the East and South China markets. It is understood that some supply from Shandong will go to Jiangsu, Zhejiang and Shanghai, while supply from North China is hindered by heavy snow. At present, spot resources are still tight, and most of the imported copper will not enter the market until next week. It is expected that the tight supply situation will continue until the end of this week. In terms of consumption, there has been some snowfall across China. Most copper processing companies said that it had no impact on their production. However, the rising copper prices and premiums and discounts have caused a certain decline in new orders. Some copper rod factories in East China have experienced high inventory of finished products and a reduction in production. In terms of if copper prices remain High, it is expected that the demand can weaken. There will be limited upside room for copper prices as the US dollar weighed.