SMM copper market morning comment July 4: Weaker US dollar drove SHFE copper above 80,000 yuan/mt

Overnight, LME copper opened at $9,817/mt, with the initial session low at $9,729.5/mt. It then climbed steadily, reaching a session high of $9,912.5/mt by the end of the trading session, before slightly fluctuating and finally closing at $9,852/mt, with a gain of 1.98%. Trading volume reached 24,000 lots, and open interest reached 326,000 lots.

Overnight, the most traded SHFE 2408 copper contract opened at 79,990 yuan/mt, initially hitting a session low of 79,790 yuan/mt. It then rose and hovered around the current level, reaching a session high of 80,520 yuan/mt during the fluctuations, and finally closed at 80,230 yuan/mt, with a gain of 1.44%. Trading volume reached 53,000 lots, and open interest reached 202,000 lots.

Macro side, US June ADP non-farm payrolls fell to 150,000, the smallest increase since January 2024. Initial jobless claims for last week rose to 238,000, higher than the expected 235,000. The US June ISM non-Manufacturing PMI recorded 48.8, far below expectations and the lowest since May 2020. A series of weak economic data increased the likelihood of a rate cut, causing the US dollar index to fall, and gold, silver, and copper prices to rise in unison. The US Fed Minutes also showed that the vast majority of officials believed economic growth was gradually cooling, and the Fed was waiting for more information to gain confidence in cutting rates. Meanwhile, US EIA crude oil inventories for the week ending June 28 decreased by 12.157 million barrels, far exceeding the expected drop of 680,000 barrels, pushing oil prices higher, which also supported copper prices. Fundamentals side, an increase in warrants reduced the available spot supply, and sellers were actively holding prices firm. Currently, both supply and demand sides are tightening. Overall, copper prices are expected to remain high today.