International Oil Prices Plummeted, Copper Prices Fell Overnight [SMM Copper Morning Comment]

Last night, LME copper opened at $9,068/mt, initially reaching a high of $9,086/mt before descending throughout the session, hitting a low of $8,983/mt mid-session, then slightly rebounding towards the close to finish at $9,019/mt, a decline of 0.85%. Trading volume reached 15,000 lots, and open interest was 281,000 lots. Overnight, the most-traded SHFE copper 2410 contract opened and peaked at 72,870 yuan/mt, initially dropped to a low of 72,250 yuan/mt, then fluctuated rangebound, and finally closed at 72,510 yuan/mt, down 0.47%. Trading volume reached 45,000 lots, and open interest was 155,000 lots. Macro front, OPEC has reduced its forecast for global crude oil demand growth for this year and the next to 2.03 million barrels per day (bpd) and 1.74 million bpd, respectively, overshadowing supply concerns caused by Tropical Storm Francine and leading to a significant drop in international oil prices, followed by a decrease in copper prices. On the fundamentals, supply side, due to the price spread between front-month and next-month contracts turning into a backwardation structure, traders showed a strong willingness to sell. In addition, with the substantial arrival of imported hydro and non-registered copper, copper cathode supply increased. Consumption side, as copper prices fluctuated upward yesterday, downstream turned cautious on stockpiling, primarily restocking as needed. However, with only three working days left before the Mid-Autumn Festival restocking period, consumption is expected to increase. On the price front, the market remains jittery ahead of tonight's release of U.S. inflation data, and copper prices are expected to continue fluctuating at low levels.