US Fed Hawkish Comments Rattled Copper Prices, Which Retreated After Rapid Rise in Night Session [SMM Copper Morning Comment]

SMM August 31: Last Friday night, LME copper opened at $14,351.5/mt, hit a high of $14,383/mt right after the open, then drifted lower all the way and dropped to $14,214.5/mt near the end of the session, before drifting higher to close at $14,285/mt, down 0.15%. Trading volume reached 16,900 lots, and open interest reached 270,000 lots, down 215 lots from the previous trading day, reflecting long liquidation. Last Friday night, the most-traded SHFE copper contract opened at 109,200 yuan/mt. In early trading, amid wild swings, it rose to 109,300 yuan/mt; then the price center dropped straight down to a low of 108,150 yuan/mt, and finally closed at 108,570 yuan/mt, down 0.05%. Trading volume reached 58,000 lots, and open interest reached 215,000 lots, down 1,422 lots from the previous trading day, reflecting long liquidation. On the macro front, geopolitically, the US and Iran exchanged attacks and an oil tanker was attacked; Trump said the strait was open. Subsequently, the preliminary US nonfarm payroll benchmark revision was released and came in far below market expectations. Several US Fed officials made hawkish remarks. Market expectations for a September rate hike heated up, and copper prices shot up before pulling back. Fundamentals side, available spot cargoes and inventories remained tight, and supply of high-quality copper was scarce. Demand side, high premiums suppressed purchase willingness, but restocking expectations at the beginning of the month partly underpinned demand. Overall, copper prices are expected to maintain a subdued consolidating trend today.