Copper prices hovered widely overnight amid mix US inflation data

LME copper prices opened at $8388/mt and closed at $8394/mt in overnight trading, a gain of 0.02%, with the low-end of $8351/mt and the high-end of $8443/mt. Trading volume was 14,000 lots, and open interest stood at 282,000 lots. The most active SHFE 2310 copper contract prices opened at 69160 yuan/mt and closed at 69100 yuan/mt last evening, down 0.01%, with the high-end of 69360 yuan/mt and the low-end of 69050 yuan/mt. Trading volumes stood at 23,000 lots and open interest stood at 155,000 lots.

On the macro front, the U.S. annualised CPI before seasonal adjustment recorded 3.7% in August, a new high since May this year and rebounded for the second consecutive time; the U.S. annualised core CPI annual rate before seasonal adjustment in August recorded 4.3%, a new low since September 2021, and falling for six consecutive months. The mixed inflation report reinforced expectations that the Federal Reserve will pause on raising interest rates, but it does not mean the end of the tightening cycle.

In terms of fundamentals, the overall transactions in East China were still quiet yesterday, mainly due to the low downstream purchasing; the inventory in South China ended five consecutive days of declines, mainly due to the low shipments from warehouses and the nearing delivery. Spot quotes in South China shifted downward yesterday.

In terms of consumption, copper prices are fluctuating at high levels, and processing companies are on the sidelines. Demand will be difficult to improve before delivery. Affected by the mixed US inflation data, copper prices are expected to remain within a narrow range in the near future.