SMM Copper Market Morning Comment (Jul 29)

Last Friday night, LME copper opened at $9,132.5/mt, initially peaking at $9,147/mt, then trending downward to a session low of $9,076/mt. By the end of the trading session, it rebounded but then fell again, hitting a session low of $9,071/mt, and finally closed at $9,073/mt, down 0.2%. Trading volume reached 17,000 lots, and open interest was 295,000 lots. Overnight, the most-traded SHFE 2409 copper contract opened at 74,250 yuan/mt, initially fluctuating upward to a high of 74,540 yuan/mt, then trending downward to a session low of 74,120 yuan/mt. By the end of the trading session, it rebounded and maintained slight fluctuations, finally closing at 74,410 yuan/mt, up 0.42%. Trading volume reached 37,000 lots, and open interest was 175,000 lots. Macro side, the US core PCE price index for June recorded a YoY increase of 2.6%, higher than expected. The market is betting that the US Fed will start cutting interest rates in September. Meanwhile, under high inflation pressure, the US economy has begun to slow down. With expectations of an economic recession and weak fundamentals, copper prices remained low. Fundamentals side, as copper prices stopped falling, downstream stocking sentiment slightly warmed up, and consumption may continue to recover this week. Overall, overseas inventories have increased for two consecutive weeks, and there are expectations of an overseas economic recession. At the same time, there is a lack of confidence in the recovery of domestic consumption. Copper prices are expected to remain weak.