Geopolitical Risks Heat Up Again; Overnight Copper Prices Pull Back Slightly [SMM Copper Morning Comment]

SMM News on August 18: Overnight, LME copper opened at $14,320/mt, touched a high of $14,343/mt in early trading, then the price center moved lower and dipped to $14,122/mt. It eventually moved sideways and closed at $14,130.5/mt, down 0.3%. Trading volume rose to 24,000 lots, and open interest rose to 270,000 lots, up 904 lots from the previous trading day, indicating bears added positions. Overnight, the most-traded SHFE copper 2609 contract opened at 108,840 yuan/mt, touched a high of 108,860 yuan/mt in early trading, then the price center fell straight down and hit bottom at 107,740 yuan/mt. It eventually moved sideways and closed at 108,070 yuan/mt, down 0.84%. Trading volume rose to 52,500 lots, and open interest fell to 199,000 lots, down 11,525 lots from the previous trading day, indicating bulls reduced positions. On the macro front, the US-Iran peace agreement expired, and Iran ruled out the possibility of an extension; Trump likewise said he was not seeking to extend the memorandum of understanding at present, reigniting geopolitical uncertainty in the Middle East. Meanwhile, the market was broadly waiting for policy signals from the US Fed meeting minutes, and copper prices consolidated at highs within a narrow range. On the fundamentals front, supply side, arrivals of imported and domestic cargo rebounded slightly, easing tight spot circulation; demand side, as copper prices shot up again, downstream purchasing sentiment remained weak. On inventories, as of Monday, August 17, SMM copper inventories in major regions nationwide increased 15,900 mt WoW from the previous Monday to 133,900 mt; total inventories increased 200 mt from 133,700 mt in the same period last year, with inventory buildup across all regions. Overall, copper prices are expected to drift higher within a narrow range today.