SMM Copper Market Morning Comment (Jul 26)

Overnight, LME copper opened at $9,000/mt, dipping to $8,996.5/mt at the beginning of the session, then fluctuating upwards to a high of $9,169.5/mt, and closed at $9,091/mt, up 0.45%. Trading volume reached 29,000 lots, and open interest was 297,000 lots. Overnight, the most-traded SHFE 2409 copper contract opened at 73,550 yuan/mt, dipping to 73,380 yuan/mt at the beginning of the session, then reaching a high of 74,450 yuan/mt, and finally closed at 74,150 yuan/mt, up 0.58%. Trading volume reached 91,000 lots, and open interest was 177,000 lots. Macro side, US Q2 GDP recorded 2.8%, higher than the expected 2%. Interest rate futures continued to price in bets on the US Fed starting to cut rates in September, and the US dollar index declined, which was bullish for copper prices. Additionally, the market focuses on the US PCE index to be released tonight. Fundamentals side, due to the continuous decline in copper prices, downstream producers still adopted a wait-and-see stance, with market purchases mainly for essential replenishment. As of Thursday, July 25, SMM copper stocks in major regions across China decreased by 1,200 mt from Monday to 357,500 mt, marking the third consecutive week of destocking, but up 258,300 mt YoY from 99,200 mt. Price-wise, copper prices are expected to have limited downward room.