LME copper prices closed with a drop of 0.44% at $8,322.5/mt last evening. Trading volume stood at 14,000 lots. Open interest stood at 256,000 lots. The most active SHFE 2308 copper contract finished at 67,950 yuan/mt overnight, up 0.07%. Trading volume was 26,000 lots and open interest stood at 190,000 lots. On the macro front, the minutes of the Federal Reserve's meeting last month showed that almost all officials expected more interest rate hikes in 2023 and said the Fed's future actions would also depend on data, but no decision has been made on the next meeting.
In terms of fundamentals, due to the impact of low-priced shipments by importers in east China, spot quotes plunged. Copper prices are still running at a high level, which still suppresses downstream demand. It is expected that east China will be affected by imported copper sources in the short term, which will prevent spot premiums from rising. Inventory in south China has dropped for 4 consecutive days, mainly due to the lack of arrivals. Given weak downstream buying interest, some sellers took profit and lowered prices, pushing down spot premiums. In terms of consumption, if copper prices do not fall, demand will hardly improve.
Copper prices are still mainly guided by macro sentiment, and will be mainly affected by US interest rate hike in July in the short term.
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