SMM Copper Morning Comment: Copper prices fell overnight

LME copper prices opened at $10191.5/mt and closed at $10075/mt last evening, down 1.28% with the high-end of $10260/mt and the low-end of $10046/mt. Trading volume was 43,000 lots and open interest stood at 336,000 lots. The most active SHFE 2407 copper contract prices opened at 82300 yuan/mt and closed at 81350 yuan/mt last evening, down 0.96%, with the high-end of 82590 yuan/mt and the low-end of 81230 yuan/mt. Trading volumes stood at 65,000 lots and open interest stood at 196,000 lots. On the macro level, Federal Reserve Chairman Powell reiterated that interest rates may remain high for a longer period of time. He does not think that the next move may be a rate hike and is more likely to maintain the policy interest rate at the current level. In terms of fundamentals, from the supply side, domestic refineries have entered maintenance, and domestic copper supply has declined on a month-on-month basis. As delivery approaches, the amount of copper sent to warehouses has increased. In addition, due to the weakening import price ratio, there are differences in the acceptable prices between buyers and sellers, and only some of the goods slated to arrive soon at the port are sold at low prices. In terms of consumption, downstream processing companies are still mainly replenishing stocks on demand against high copper prices. On the fundamentals, as of Monday May 13, SMM copper inventory across major Chinese markets decreased 2,100 mt from last Thursday to 400,100 mt, up 259,000 mt YoY. In terms of price, we will pay attention to the upcoming US CPI data. It is expected that copper prices will have limited room for decline.