On the macro front, global markets this week were primarily driven by US-Iran tensions and the US Fed's policy meeting. Early in the week, both the US and Iran temporarily sent signals of de-escalation, easing market concerns about rising energy prices and inflationary pressure. A recovery in risk appetite pushed copper prices higher. The market then entered a wait-and-see phase ahead of the Fed meeting, where the Fed ultimately held rates steady. The statement was broadly neutral, and market expectations for further rate hikes within the year were somewhat dampened. However, Trump once again stated he would take action against Iran in response to attacks on US troops in the Middle East, causing geopolitical conflict risks to re-escalate and capping further upside for copper prices. As of 9:30 am Beijing time on July 30, 2026, LME copper hit a weekly low of $13,570/mt before rebounding to a high of $13,802/mt, a rebound of $232/mt, or roughly 1.71%. The most-traded SHFE copper contract hit a low of 104,356 yuan/mt before rebounding to 105,530 yuan/mt, up approximately 1.12%.
On the fundamentals side, the tight supply situation for China's copper cathode eased somewhat. As of July 30, SMM copper inventories in major Chinese regions rose to 111,900 mt, up 2,700 mt WoW, with the previous continuous destocking trend shifting to accumulation. Additionally, the ongoing destocking and high level of cancelled warrants on the LME, along with tight spot supply outside China, provided significant support for LME copper's downside resilience. Supply side, domestic and imported cargo arrivals edged up recently, with imported copper from brands such as Peru large plate, ESOX, and Myanmar circulating in the market, supplementing the previously tight spot supply. Demand side remained under pressure from the traditional consumption off-season and high copper prices, with downstream mainly maintaining just-in-time procurement. While some restocking demand was released at lower prices following the pullback in copper, a gap persisted between end-user order prices and actual transaction prices, keeping the overall improvement in demand limited. Regarding secondary copper, the price difference between copper cathode and copper scrap stayed high, but with sufficient raw material inventories at secondary copper rod enterprises and a slowdown in downstream cargo pick-up, overall purchasing willingness in the market remained subdued.
Looking ahead to next week, macro attention will remain on the progress of the US-Iran conflict, as well as the impact of US employment and inflation data on Fed policy expectations. Should Middle East tensions escalate further, energy prices and inflation expectations could rebound, putting pressure on risk assets. Fundamentals wise, imported copper is expected to continue arriving, and domestic spot supply may increase further. Meanwhile, the consumption off-season has not yet ended, and downstream appetite for high-priced cargoes remains limited. However, domestic inventories are still low, and the backwardation structure will also limit the downside room for copper prices. Overall, LME copper is expected to trade in the $13,600–13,880/mt range next week, with the most-traded SHFE copper contract moving between 104,000–106,000 yuan/mt, likely consolidating on a subdued note.
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