PMI Data Reignited Recession Fears, Copper Prices Plummeted [SMM Copper Morning Comment]

Overnight, LME copper opened at $8,968/mt. After a slight initial fluctuation, it peaked at $9,034/mt. The price then dipped to a low of $8,926.5/mt before rebounding and stabilizing towards the end of the session, closing at $8,988/mt, a drop of 2.49%. Trading volume reached 30,000 lots, and open interest was 280,000 lots. Overnight, the most-traded SHFE copper 2410 contract opened at 72,400 yuan/mt, peaked at 72,520 yuan/mt initially, then dipped to a low of 71,680 yuan/mt before slightly rebounding and stabilizing towards the end of the session, and finally closed at 72,170 yuan/mt, a drop of 1.74%. Trading volume reached 72,000 lots, and open interest was 168,000 lots. Macro-wise, the US August ISM manufacturing PMI recorded 47.2, with the manufacturing new orders index hitting its lowest since May 2023. Both PMI and July construction spending index were lower than expected. Ahead of the key data release on Friday, market fears of a recession reignited. Under this sentiment, all major European stock indices marked their worst performance since the global stock market plunge in early August. Additionally, signs emerged of an agreement to resolve the dispute disrupting Libya's oil production and exports, leading to a drop in oil prices. Copper prices significantly declined due to recession fears and falling oil prices. On the fundamentals side, the delay in the inflow of imported copper led to a slight reduction in supply. Holders firmed their offers, raising premiums. However, as copper prices fell, downstream enterprises saw an increase in orders on hand, indicating procurement demand. The overnight drop in copper prices is expected to further stimulate consumption. Overall, the market is once again gripped by recession fears, awaiting the key data release on Friday. Copper prices are expected to remain low today due to a lack of support.