LME copper closed at $8,595/mt last Friday evening, a drop of 0.39%. Trading volume was 15,000 lots and open interest stood at 255,000 lots. SHFE was closed last Friday evening due to the Labour Day holidays.
On the macro front, the US Federal Reserve raised interest rates by 25 basis points to 5.00-5.25% at its May meeting. The wording of the Fed's resolution is relatively neutral. The market expects the Fed to pause the current round of interest rate hikes, and the focus will turn to Fed Chairman Powell's speech later.
SMM data shows that as of April 28, SMM copper inventory across major Chinese markets stood at 163,500 mt, down 13,400 mt from April 17 and down 20,000 mt from April 21. The inflow of some imported copper after customs clearance increased inventories in Shanghai, while active stockpiling driven destocked inventories in Guangdong.
After the fall of copper prices, the purchase volume of some enterprises increased significantly, but the growth was limited due to the fear of price declines. Due to the impact of the Fed's interest rate hike, copper futures prices inched lower. With the lack of upward momentum provided by fundamentals, copper prices may be affected by Fed chairman's speech on copper prices.
