Copper prices moved rangebound

LME copper prices opened at $8269.5/mt and closed at $8198.5/mt last Friday evening, a drop of 0.32%, with the high-end of $8281/mt and the low-end of $8196.5/mt. Trading volume was 16,000 lots and open interest stood at 263,000 lots. The most active SHFE 2311 copper contract prices opened at 68140 yuan/mt and closed at 67850 yuan/mt last evening, down 0.1%, with the high-end of 68170 yuan/mt and the low-end of 67770 yuan/mt. Trading volumes stood at 23,000 lots and open interest stood at 138,000 lots.

On the macro front, the initial value of the Markit manufacturing PMI in the United States in September was recorded at 48.9, a new high in 2 months, but it has been in contraction range for five consecutive months; the initial value of the service industry PMI was recorded at 50.2, which was lower than the expected 50.6, which was the lowest in 8 months. The preliminary comprehensive PMI value was 50.1, a new low in seven months. Fed Governor Bowman said that inflation is still too high and further interest rate increases may be appropriate. SMM data showed that as of Friday August 22, copper inventory across major Chinese markets stood at 94,700 mt, down 16,100 mt from last Monday and down 6,200 mt from two Fridays ago.

Although there is an inflow of imported copper in East China, the total volume has decreased compared with last week. And with the sharp drop in copper prices, downstream replenishment enthusiasm has increased, resulting in a decrease in inventory; inventories in South China have declined slightly, mainly due to reduced shipments from smelters after delivery, and downstream began pre-holiday stocking. In terms of consumption, this week will enter the peak pre-holiday stocking period, and demand is expected to continue to increase. Copper prices are expected to recover slightly.