Market Risk Aversion Sentiment Strengthens, Copper Prices Shift Lower [SMM Copper Morning Comment July 22]

Last Friday night, LME copper opened at $9,350.5/mt. After a brief initial fluctuation, it rose to a high of $9,374/mt, then fluctuated downward, touching a low of $9,283/mt at the end of the trading session, and finally closed at $9,290/mt, down 0.86%. Trading volume reached 25,000 lots, and open interest reached 306,000 lots. Last Friday night, the most-traded SHFE copper 2408 contract opened at 76,350 yuan/mt. After a brief initial decline, it rose to a high of 76,450 yuan/mt, then fluctuated downward, touching a low of 75,990 yuan/mt at the end of the trading session, and finally closed at 76,000 yuan/mt, down 1.02%. Trading volume reached 30,000 lots, and open interest reached 148,000 lots.

Macro side, last Friday, Microsoft experienced a severe service outage, affecting global companies and users, impacting the LME, multiple banks, and triggering a risk aversion reaction in the financial markets. Additionally, concerns about real consumption demand led some speculators to take profits and exit the market.

Fundamentals, copper prices fell, and consumption demand followed suit. Due to the tight supply of both domestic and imported copper, spot premiums/discounts continued to rise and are expected to remain firm.

Price side, this week, the US core PCE data will be released, and the market is expected to adopt a wait-and-see attitude at the beginning of the week, with copper prices likely to consolidate.