US Dollar Index Falls to Lowest Since April, Copper Prices Remain Under Pressure Amid Demand Concerns [SMM Copper Morning Comment July 18]

Overnight, LME copper opened at $9,710.5/mt, initially hitting a high of $9,737.5/mt before declining throughout the session to a low of $9,609.5/mt at the end of trading. It then consolidated and finally closed at $9,616/mt, down 0.50%. Trading volume reached 20,000 lots, and open interest was 311,000 lots.
Overnight, the most-traded SHFE copper 2408 contract opened at 78,390 yuan/mt, initially hitting a high of 78,500 yuan/mt before fluctuating downward to a session low of 78,030 yuan/mt. At the end of the trading session, it rose slightly and then consolidated, finally closing at 78,180 yuan/mt, down 0.52%. Trading volume reached 30,000 lots, and open interest was 175,000 lots.

Macro side, the US Fed's Beige Book showed slight economic growth and slowing inflation in the US. However, due to uncertainties, economic growth expectations for the next six months have slowed. US Fed officials indicated that there might be a reason to cut interest rates in the coming months. The US dollar index fell to its lowest point since April, but copper prices remained under pressure due to demand concerns and inventory pressure.

Fundamentals, supply side, the volume sent to warehouses by smelters after delivery has significantly decreased, and arrivals have somewhat reduced. Demand side, although copper prices have fallen, sellers are holding firm on prices due to destocking expectations, and trading has not significantly improved. Overall, with mixed factors, copper prices are expected to lack upward momentum.