LME copper prices closed at $7,891/mt overnight, a decline of 2.35%. Trading volume was 27,000 lots and open interest stood at 254,000 lots. The most active SHFE 2307 copper contract finished at 62,990 yuan/mt, down 1.5%. Trading volume was 89,000 lots and open interest stood at 215,000 lots.
On the macro front, the US Markit services PMI hit a 13-month high in May, showing a surge in demand for tourism and leisure in the US, and inflationary pressures still exist. In addition, the unease in the US debt ceiling negotiations made investors turn to safe-haven assets, and the dollar rose, weighing down copper prices. SHFE copper prices fell below 64,000 yuan/mt yesterday. But sellers held prices firm, and downstream buying interest was weak due to a wider price spread between SHFE front-month and next-month contracts.
The overall trading was not very active. In addition, with the influx of imported copper, there was an impact on spot quotes. In view of the cargoes under warrants offered for sale, spot quotes should fall from highs. In terms of consumption, downstream purchases weakened at the end of the month. Affected by the fear of domestic and overseas economic recession, copper prices continued to fall to new lows, and are expected to remain rangebound at low levels.
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