With Concerns of Economic Recession, Improved Consumption Stabilized Copper Prices [SMM Copper Morning Comment]

LME copper opened at $8,955/mt overnight, initially dipped to $8,937/mt, then fluctuated upwards to a high of $9,038/mt during the session, but fell back towards the end, closing at $8,965/mt, down 0.26%. Trading volume reached 23,000 lots, and open interest was 278,000 lots. The most-traded SHFE copper 2410 contract opened at 71,960 yuan/mt overnight, initially fluctuated downwards but then rose to a high of 72,360 yuan/mt during the session, subsequently fell back, hitting a low of 71,820 yuan/mt towards the end, and finally closed at 71,920 yuan/mt, down 0.1%. Trading volume reached 45,000 lots, and open interest was 167,000 lots. On the macro front, US job openings in July recorded 7.673 million, the lowest level since January 2021. The probability of the US Fed cutting interest rates by 50 basis points in September rose to 44%, and the US dollar index plunged. Meanwhile, major European stock indices fell to a two-week low on Wednesday, with concerns of economic recession persisting. However, as copper prices fell significantly, domestic consumption buying increased, stabilizing copper prices. On the fundamentals, as copper prices fell significantly, trading improved to some extent. At the same time, due to the narrowing price spread between front-month and next-month contracts, the willingness to sell among holders increased, leading to a rise in both supply and demand. If copper prices stabilize, it may lead to a sustained release of consumption. Overall, the significant drop in copper prices and the improvement in consumption provided some support to copper prices. Today, attention will be on the US non-farm payrolls data, and it is expected that copper prices will stabilize before the data is released.