SMM

LME copper opened at $9,424/mt overnight, initially fluctuating and reaching a high of $9,444/mt. It then dipped, maintaining a wide fluctuation throughout, hitting a low of $9,393.5/mt, and finally closed at $9,400/mt, up 0.22%. Trading volume reached 24,000 lots, and open interest was 270,000 lots. The most-traded SHFE copper 2410 contract opened at 74,810 yuan/mt overnight, initially hitting a low of 74,680 yuan/mt. It then rose, maintaining fluctuations throughout, reaching a high of 75,050 yuan/mt, and finally closed at 74,910 yuan/mt, up 0.63%. Trading volume was 32,000 lots, and open interest was 143,000 lots. On the macro side, at 2 a.m. Beijing time, the US Fed significantly cut rates by 50 basis points, lowering the federal funds rate from 5.25%-5.50% to 4.75%-5.00%, marking the first cut since March 2020. Currently, Fed officials believe that with inflation nearing the 2% target and rising unemployment, they need to lower rates to the 4.25%-4.50% range by the end of the year, higher than their June forecast. The dot plot predicts that policymakers expect to cut rates by 25 basis points at both the November and December meetings this year. Copper prices rose ahead of the rate decision as the market widely anticipated the cut. On the fundamentals side, domestic smelters have passively reduced production, increasing downstream concerns about future supply. The spot market remained stable on the last trading day before delivery, with premiums expected to rise slightly after delivery today. Overall, the significant 50 basis point rate cut by the US Fed is expected to boost copper prices.