SMM Copper Morning Comment

LME copper prices opened at $8270/mt overnight before reaching a low of $8245/mt and a high of $8320/mt, and closed at $8312/mt, a rise of 0.34%. Trading volumes were 22,000 lots and open interest stood at 274,000 lots. The most active SHFE 2403 copper contract prices opened at 67580 yuan/mt and finished at 67690 yuan/mt last Friday evening, down 0.03%, with the low-end of 67380 yuan/mt and the high-end of 67790 yuan/mt. Trading volume was 32,000 lots, and open interest stood at 150,000 lots. The number of initial jobless claims in the United States in the week to January 13th recorded 187,000, a new low since the week of September 24, 2022. The solid labor force data suppressed market expectations for an interest rate cut by the Federal Reserve, and the U.S. index rose. In terms of fundamentals, from the supply side, warehouse receipts in Shanghai have gradually flowed into the market, and the supply of goods has increased compared with the previous few days. This has also dealt a blow to the premiums and discounts in the spot market, and supply is expected to remain relatively adequate in the near future; in terms of consumption, with copper prices and spot quotes weakening, downstream purchasing volume has increased to a certain extent, but pre-holiday stocking has not yet begun. It is expected that most companies will start stocking next week. Prices will remain at low levels in the near term.