Overseas Inventories Continue to Increase, Copper Prices Fall to Three-Month Low [SMM Copper Morning Comment July 19]

Overnight, LME copper opened at $9,540/mt, initially hitting a high of $9,541/mt before declining throughout the session. After a brief rebound, it continued to fluctuate downward, hitting a session low of $9,370.5/mt at the end of the trading session and finally closed at $9,371/mt, down 2.55%. Trading volume reached 38,000 lots, and open interest reached 310,000 lots.
Overnight, the most-traded SHFE copper 2409 contract opened at 77,310 yuan/mt, initially hitting a high of 77,460 yuan/mt before fluctuating downward throughout the session. It hit a session low of 76,600 yuan/mt during the end-of-session consolidation and finally closed at 76,640 yuan/mt, down 2.21%. Trading volume reached 77,000 lots, and open interest reached 176,000 lots.

Macro-wise, the European Central Bank maintained its interest rates, and the likelihood of a US Fed rate cut increased. However, due to the continuous increase in LME Asian inventories and COMEX inventories, and the domestic Third Plenary Session still awaiting policy guidance, market sentiment weakened, and copper prices fell to a three-month low.

Fundamentals-wise, sellers held back cargoes in anticipation of higher premiums, and downstream purchasing sentiment was somewhat suppressed. Overall trading activity only slightly warmed up, and it is expected that copper prices will improve somewhat after a significant decline. As of Thursday, July 18, SMM copper stocks in national major regions decreased by 9,800 mt from Monday to 375,100 mt, and by 13,500 mt from last Thursday, marking the second consecutive week of weekly destocking.

In summary, the market is waiting for guidance, and copper prices are expected to remain low today.