Copper Prices Fluctuated Downward on Friday Night but Support Remains in the Market [SMM Copper Morning Comment]

SMM reported on March 24: On Friday evening, LME copper opened at $9,844/mt, reaching a high of $9,884.5/mt at the beginning of the session. It then declined sharply to a low of $9,802/mt and rebounded in the end, closing at $9,852/mt, down 0.59%. Trading volume reached 18,000 lots, and open interest stood at 294,000 lots. The most-traded SHFE copper 2505 contract opened at 80,530 yuan/mt, hitting a high of 80,840 yuan/mt at the start of the session. It then fell sharply to a low of 80,190 yuan/mt and rebounded in the end, closing at 80,630 yuan/mt, down 0.62%. Trading volume reached 54,000 lots, and open interest stood at 238,000 lots. On the macro front, US Fed officials stated on Friday that they were not in a hurry to cut interest rates, leading to a rise in the US dollar index, which put pressure on copper prices. However, concerns over Trump's trade policies potentially impacting US economic growth, along with market expectations of two interest rate cuts by the Fed within the year, may continue to weigh on the US dollar, supporting copper prices. Fundamentally, the price spread structure between the SHFE copper 2404 and 2405 contracts quickly shifted to a backwardation structure, indicating the market's expectation of near-term supply tightness was gradually being realized. Meanwhile, as futures prices pulled back, downstream demand showed some improvement, and stockpiling sentiment slightly increased, with domestic social inventory expected to continue to decline over the weekend. Overall, changes in both supply and demand provided support for copper prices, but attention still needed to be paid to the speed of inventory reduction and the sustainability of downstream demand. In terms of pricing, the final deadline for Trump's reciprocal tariffs was approaching, and the current tariff expectations continued to influence copper prices, with a focus on changes in US economic data. Under the resonance of macro and fundamental factors, it was expected that there would be limited downside for copper prices today.

SMM

Copper Prices Fluctuated Downward on Friday Night but Support Remains in the Market [SMM Copper Morning Comment]

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