International Oil Prices Rose, Copper Prices Increased Overnight [SMM Copper Morning Comment]

Yesterday, LME copper was closed due to the UK summer bank holiday. Overnight, the most-traded SHFE copper 2410 contract opened at 74,850 yuan/mt, initially reaching a high of 75,070 yuan/mt, then narrowly fluctuated downward, hitting a low of 74,690 yuan/mt near the end of the session, and finally rebounded to close at 74,960 yuan/mt, up 0.83%. Trading volume reached 34,000 lots, and open interest reached 160,000 lots. Macro side, the eastern Libyan government announced the cessation of all oil production and exports, causing international oil prices to surge, which in turn pushed copper prices up. Additionally, US Fed's Daly stated that it is appropriate to start cutting interest rates now, but it is too early to determine the extent of the cuts. Fundamentally, a large amount of imported copper flowed into domestic trade over the weekend, increasing the supply of copper cathode in the spot market, causing premiums to fall under pressure. On the consumption side, as copper prices rose, downstream buyers were hesitant to purchase, leading to inactive procurement. As of Monday, August 26, SMM national copper stocks in major regions slightly decreased by 100 mt from last Thursday to 283,400 mt, continuing the destocking trend, but the decline significantly slowed down. Total stocks were still 206,000 mt higher YoY compared to 77,400 mt last year. In terms of prices, copper prices are expected to have some upward potential.