LME Copper Closed Higher While SHFE Copper Edged Lower, Copper Prices Moved Sideways [SMM Copper Morning Comment]

SMM, Aug 14: Overnight, LME copper opened at $14,071/mt and dipped to a low of $14,066/mt in early trading. The copper price center then drifted higher to test $14,151.5/mt before settling at $14,135.5/mt, up 0.18%. Trading volume reached 20,000 lots, and open interest stood at 266,000 lots, up 2,423 lots from the previous trading day, suggesting that longs added positions. Overnight, the most-traded SHFE copper 2609 contract opened at 107,930 yuan/mt and initially rose to 107,990 yuan/mt. The copper price center then moved straight down to a low of 107,660 yuan/mt, followed by wild swings before settling at 107,790 yuan/mt, down 0.03%. Trading volume reached 28,000 lots, and open interest stood at 206,000 lots, down 3,254 lots from the previous trading day, suggesting that longs cut positions. On the macro front, rate futures market pricing for US Fed rate hikes this year fell to 23 bp, and it no longer fully priced in one full rate hike. US Fed officials Hammack and Barkin reiterated that more rate hikes were still needed, while Goolsbee argued that inflation was driven mainly by tariffs and oil prices and could be a one-off factor, leaving the overall stance hawkish. In the Middle East, Iran warned that safe passage through the Strait of Hormuz would not be permitted without approval. The US military formed a multinational drone force and dispatched the aircraft carrier USS Washington to the Middle East, with military deployment continuing to intensify, keeping overnight copper prices consolidating at highs. On the fundamentals side, supply was generally ample, but high-quality copper and SX-EW copper were relatively scarce, with clear divergence among brands. On the demand side, although copper prices pulled back slightly, wait-and-see sentiment among downstream users was strong near delivery; procurement was mostly need-based, and overall performance was weak. In terms of inventories, as of Thursday, Aug 13, SMM copper inventories in major regions nationwide fell 2,500 mt WoW from the previous Thursday to 116,700 mt, with total inventories down 8,900 mt YoY from 125,600 mt in the same period last year. Overall, copper prices are expected to move sideways with a slightly firm bias today.