US Dollar Index and Fundamentals Remain Weak, Copper Prices Expected to Hold Steady [SMM Copper Morning Comment July 5]

Overnight, LME copper opened at $9,874.5/mt, initially rose to a session high of $9,918/mt, then declined to a session low of $9,851/mt, and slightly rebounded by the end of the trading session, closing at $9,886/mt, with a gain of 0.35%. Trading volume reached 14,000 lots, and open interest reached 326,000 lots.

Overnight, the most-traded SHFE copper contract (2408) opened at 80,360 yuan/mt, initially rose slightly to a session high of 80,390 yuan/mt, then declined to a session low of 79,830 yuan/mt, and consolidated by the end of the trading session, closing at 80,000 yuan/mt, with a loss of 0.10%. Trading volume reached 32,000 lots, and open interest reached 198,000 lots.

Macro-wise, the European Central Bank's meeting minutes showed that officials were cautious about cutting rates too quickly and expressed concerns about the inflation-fighting process. Additionally, US officials announced a breakthrough in the stalemate of the Israel-Palestine ceasefire negotiations. Currently, the expectation of a US Fed rate cut and weak demand are jointly keeping copper prices relatively stable.

Fundamentals-wise, recent arrivals of imported copper in south China have increased, and although sellers are actively holding prices high, overall trading has slightly improved due to bullish sentiment. As of Thursday, July 4, SMM national mainstream copper stocks increased by 2,600 mt from Monday to 409,800 mt, and up by 10,700 mt from a week ago, marking two consecutive weeks of weekly stock accumulation.

Looking ahead, according to SMM, next week's arrivals of imported copper are expected to decrease from a week ago, but approaching delivery, smelters will actively deliver to warehouses. It is expected that next week's total supply will increase from this week. If copper prices remain high, consumption may also be suppressed. Overall, copper prices are expected to hover around the current level.