Copper Futures Prices Rebound, Market Concerns over US Recession Grew

LME copper prices closed at $8,243/mt last Friday evening, a rise of 0.67%. Trading volume was 20,000 lots and open interest stood at 254,000 lots. SHFE 2306 copper contract finished at 64,940 yuan/mt overnight, up 0.87%. Trading volume was 64,000 lots, and open interest stood at 193,000 lots. On the macro front, the US dollar rose last Friday and recorded its biggest weekly gain since February, mainly due to the decline in consumer confidence index, which intensified market concerns about the US debt ceiling and monetary policy, bolstering the risk appetite for the US dollar.

SMM data shows that as of April 12, SMM copper inventory across major Chinese markets stood at 152,000 mt, down 15,400 mt from May 8 and down 16,100 mt from two Fridays ago. The inventory was up 33,100 mt from the same period last year. Except for Tianjin where inventories increased slightly, inventories fell across other regions. The continuous sharp drop in copper prices narrowed the price spread between copper cathode and copper scrap, driving wire and cable plants to step up purchases of copper rod produced with copper cathode. This boosted copper cathode consumption.

The import window has opened recently, and there will be customs clearance of imported copper. The recently released data grew market expectations over an economic recession in the United States. The financial market turmoil puts pressure on prices, and insufficient domestic demand can hardly give copper prices a boost.

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