Copper Prices Rebounded As US Debt Crisis Was Addressed

The LME market was closed yesterday. The most active SHFE 2307 copper contract finished at 65,080 yuan/mt overnight, up 0.23%. Trading volume was 32,000 lots and open interest stood at 198,000 lots. On the macro front, the U.S. debt ceiling agreement boosted risk appetite in global markets and weakened the safe-haven appeal of the dollar, which fell on Monday. However, the core inflation in the United States is at a high level, and the market expects the Fed to raise interest rates in June.

As of Monday May 29, SMM copper inventory across major Chinese markets stood at 118,300 mt, down 100 mt from last Friday but up 11,000 mt from the same period last year. Although there are imported copper in east China, the domestic supply of goods is still tight, resulting in inventory declines.

The arrivals of both imported copper and domestic copper in south China increased, and consumption has declined after the copper price rebounded. In terms of consumption, demand decreased towards the end of the month, and the rebound in copper prices also caused consumption to fall. Market sentiment was positive after the US debt crisis has been lifted, but copper prices will lack ability to rebound further in the short term.

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