On the macro front, US inflation data rebounded, with the June CPI recording the largest MoM increase in five months. Retail sales were stronger than expected, indicating that tariff pressures are gradually being passed on to consumers. There has been a growing divergence within the US Fed over the outlook for interest rate cuts, leading to repeated shifts in market judgments on the direction of monetary policy. The US dollar index has gradually strengthened since July, putting slight pressure on copper prices during the week. Meanwhile, Trump's foreign trade policy has become more aggressive. After explicitly imposing a 50% tariff on copper, he also indicated that he would send tariff letters with a unified rate of 10%-15% to over 150 countries in the future and threatened to impose an additional 30% tariff on goods from Mexico, the EU, and others starting from August 1. The escalating trade tensions, coupled with geopolitical uncertainties such as sanctions on Russia, continue to suppress market risk appetite. This week, LME copper prices fell to the range of $9,600-$9,700/mt and fluctuated around this level, while SHFE copper prices oscillated within the range of 77,500-78,500 yuan/mt.
On the fundamental front, spot trades of copper concentrates were sluggish this week. Spot TC stopped falling and rebounded. The LME structure reverted from BACK to Contango. After the reversal of the LME copper structure, the market remained cautious, but no changes in the QP have been heard so far. The market remained calm before the details of the US tariff on copper were announced. Domestically, this week marked the delivery of the SHFE copper 2507 contract. On the delivery day, the price spread between futures contracts narrowed rapidly, and the near-month structure also reverted to Contango. Downstream consumption was sluggish, and overall demand entered the off-season.
Looking ahead to next week, copper prices are expected to remain fluctuating at highs amid policy disruptions and the US dollar's movement. The market's focus will be on further clarification of Trump's tariff policy and the US Fed's policy stance at the beginning of August. It is expected that LME copper prices will fluctuate within the range of $9,600-$9,800/mt, and SHFE copper prices will fluctuate within the range of 77,000-78,500 yuan/mt. On the spot front, the domestic off-season has led to a decline in the operating rate of copper semis, putting pressure on spot premiums amid expectations of inventory buildup. However, the price spread between brands has widened. It is expected that spot prices against the SHFE copper 2508 contract will range from a premium of 20 yuan/mt to a premium of 280 yuan/mt.
