LME copper prices closed at $8,339/mt last Friday evening, down 0.39%. Trading volume was 17,000 lots and open interest stood at 253,000 lots. The most active SHFE 2307 copper contract finished at 67,240 yuan/mt overnight, up 0.54%. Trading volume was 50,000 lots, and open interest stood at 184,000 lots.
On the macro front, the US labour market has cooled, and the market expectations for the Fed to suspend interest rate hikes strengthened. However, it is necessary to pay attention to the inflation data to be released this week which will guide the Fed's final decision.
On the fundamentals, as of Friday June 9, SMM copper inventories in major Chinese markets added 2,500 mt from last Monday to 109,400 mt , down 1,700 mt from two Fridays ago. Inventories have fallen for five consecutive weeks. The increase in inventory in east China is mainly due to more customs clearance of imported copper, while the increase in inventory in south China is due to the large inflows of imported copper and poor consumption. On the demand side, as copper prices continue to rise and the price spread between copper cathode and copper scrap widens, copper cathode consumption will fall.
In terms of prices, the domestic stimulus policies have spurred market optimism, and the expectations of Fed’s suspension of interest rate hike also weakened the pressure on copper prices. Recently, copper prices have been strong thanks to the guidance from macro front.
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