Overnight copper prices under pressure amid strong dollar and higher inventories [SMM Copper Morning Comment]

LME copper prices opened at $8537.5/mt and closed at $8449/mt overnight, a drop of 1.29%, with the low-end of $8444/mt and the high-end of $8545/mt.Trading volume was 19,000 lots, and open interest stood at 297,000 lots. SHFE 2404 copper opened at 68800 yuan/mt overnight and fell to 68690 yuan/mt after rising to 68950 yuan/mt, closing at 68790 yuan/mt, down 0.51%. The trading volume was 24,000 lots, and open interest stood at 151,000 lots. On the macro front, the slight strengthening of the U.S. dollar last night combined with rising Chinese inventories suppressed copper prices. However, under the news of sanctions, oil and natural gas prices have both risen, which is expected to have a driving effect on copper prices. The market will keep an eye on key inflation data on Thursday. On the fundamentals, as of Monday February 26, SMM copper inventories in major Chinese markets grew 11,900 mt to 298,300 mt compared with last Thursday. In terms of consumption, the downstream operating rate has recovered this week, driving certain demand, but the overall increase in consumption is limited, mainly long-term orders and rigid demand replenishment. Overall, both supply and consumption continued to grow. In terms of price, on the whole, as the domestic downstream operating rate gradually recovers and consumption continues to improve, copper prices are expected to rise slightly driven by oil prices and natural gas.