Copper Prices Fluctuate At A High Level As Powell's Speech Is Unclear About The Monetary Policy Guidance

LME copper prices opened at $8432/mt and closed at $8,359/mt last Friday evening, a rise of 0.02%, with the high-end of $8442/mt and the low-end of $8322/mt. Trading volume was 15,000 lots and open interest stood at 280,000 lots. The most active SHFE 2310 copper contract prices opened at 69010 yuan/mt and closed at 68770 yuan/mt last Friday evening, a drop of 0.09%,down 0.09%, with the high-end of 69040 yuan/mt and the low-end of 68600 yuan/mt. Trading volume was 32,000 lots, and open interest stood at 146,000 lots.

On the macro front, Powell was slightly ambiguous in his speech last Friday. He hinted that interest rates may be raised again, while expressing a cautious attitude towards raising interest rates. Due to the Fed's unclear policy guidance, the conditions of the US consumer market and labor market will play an important role in the Fed's decision-making.

On the fundamentals, as of August 25, SMM copper inventory across major Chinese markets increased by 1,300 mt from last Monday to 74,200 mt. Due to the inflows of imported copper and the weakening consumption due to rising copper prices, inventories in east China have increased. In south China, due to the lack of imported copper and domestic copper replenishment, the inventory has dropped for seven consecutive days. High copper prices put pressure on demand. In terms of prices, the U.S. economic data in the past week will have a strong guidance on copper prices, and it is expected that copper prices still have room to rise.