Copper Prices can Hardly Recover Remarkably, Fluctuated at Low Levels as Market Awaiting Fed Interest Rate Decision

LME copper prices closed at $8,529/mt overnight. Trading volumes were 22,000 lots and open interest stood at 256,000 lots. SHFE 2306 copper contract prices finished at 66,880 yuan/mt overnight, down 0.33%. Trading volume was 47,000 lots, and open interest stood at 181,000 lots. On the macro front, the U.S. dollar retreated yesterday on fresh signs of a U.S. economic slowdown after data showed core capital goods orders fell more than expected in March, while Europe’s economic outlook may move upwards unexpectedly, driving the euro stronger.

In terms of fundamentals, downstream stockpiling strengthened as the Labour Day holidays neared, bolstering spot quotes. However, the import window is about to open recently, and the market is worried that the increase in the supply of imported goods will restrain the increase in spot quotes. In terms of consumption, some downstream companies were actively purchasing while copper prices were falling, and demand is expected to pick up slightly in the near term. In terms of prices, the weakening of the US dollar has given copper prices a chance to rebound, but the market is still worried about demand and is still cautious before the Fed's interest rate hike meeting. It is expected that copper prices will hardly recover significantly in the short term.