Copper Prices Went Down again amid Severe Market Concerns

LME copper prices closed at $8,144/mt overnight, a decline of 1.21%. Trading volume was 15,000 lots and open interest stood at 256,000 lots. SHFE 2307 copper contract finished at 64,770 yuan/mt overnight, down 0.52%. Trading volume was 37,000 lots, and open interest stood at 185,000 lots.

On the macro front, the market is waiting for new data to find signs of whether the Fed may continue to raise interest rates. The hawkish speech of Fed officials made the market more worried. At the same time, attention should be paid to the debt ceiling issue.

The US index fluctuated higher on Monday. As of Monday May 22, SMM copper inventory across major Chinese markets stood at 122,700 mt, down 800 mt from last Friday but up 12,900 mt from the same period last year. Spot premiums in east China were high last Friday, and shipments arrivals of both imported and domestic copper increased. This drove up inventories in Shanghai and Jiangsu. In Guangdong, shipments arrivals decreased over the weekend while shipments leaving Guangdong increased, significantly reducing local inventories.

In terms of consumption, downstream demand is more sensitive to changes in copper prices, and overall consumption is in a relatively weak. Most market participants are bearish and domestic demand is weak. It is expected that copper prices will remain low in the short term.

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