SMM Copper Morning Comment

LME copper prices opened at $8603/mt and closed at $8596/mt in last evening trading, a gain of 1.47%, with the low-end of $8603/mt and the high-end of $8715/mt. Trading volume was 21,000 lots, and open interest stood at 280,000 lots. The most active SHFE 2402 copper contract prices opened at 69260 yuan/mt and closed at 69620 yuan/mt last evening, up 0.62%, with the high-end of 69870 yuan/mt and the low-end of 69260 yuan/mt. Trading volumes stood at 37,000 lots and open interest stood at 160,000 lots. On the macro front, the market expects that the United States will soon start cutting interest rates, which has strengthened sentiment, causing the U.S. dollar index to fall, which is bullish for copper prices. In addition, the profits of domestic industrial enterprises in November increased by 29.5% year-on-year, achieving positive growth for four consecutive months, which also stimulated copper prices. In terms of fundamentals, from the supply side, due to the impact of shipping schedules in some regions, the arrivals of imported copper will be delayed in the near future. It is expected that the supply of imported copper will decrease in the second half of this week. Domestic sellers are under the pressure of clearing inventories at the end of the year and have shipped a large amount of copper. It is expected that the overall supply of copper will decline in the second half of this week. In terms of consumption, many downstream companies have made replenishment. This week, as the accounts are about to be closed at the end of the year. If copper prices remain high, demand is expected to change little. It is expected that copper prices will lack ability to rise further in the near future.