SHANGHAI, Aug 5 (SMM) - Following a small rebound, SHFE and LME copper fell again this week, with SHFE copper down for three consecutive days, and LME copper down for four consecutive days. SHFE copper closed down 2.16% yesterday, while LME copper fell by 0.51% as of CST 17:11.
The average spot price of SMM1# copper cathode was 59,960 yuan/mt yesterday, down 0.5% from the previous day.
On the macro side, the U.S. factory orders rose in June and the service industry activity unexpectedly rebounded in July. The market expects the Fed to continue to raise interest rates. A hawkish speech by a Fed official also revealed the current determination of the United States to control inflation. The September Fed meeting has become the focus of market attention. Affected by market concerns, copper futures fell.
In terms of fundamentals, the domestic copper social inventory is still in a state of rapid destocking
Copper imported from overseas did not flow into the domestic market.
The output of domestic smelters has not fully recovered due to the overhaul, and the output of some smelters was slightly affected by the tight supply of copper scrap and blister copper.
Smelters preferred to produce copper cathode rather than secondary copper as the former is more profitable than the latter.
Due to the rapid drop in copper prices earlier, end users frequently cancelled orders, which inhibited the new orders of copper processing enterprises. However, after the copper price rebounded in mid-July, market sentiment improved and the orders of copper processing enterprises picked up. And with the acceleration of national infrastructure investment, the demand for cables has increased month-on-month.
On the whole, SMM believes that fundamentals will support copper prices in the short term.