SMM reported on July 4: Overnight, LME copper opened at $9,997/mt, reaching a high of $10,013/mt shortly after the opening. It then dropped sharply before rebounding to a high, only to continue declining and hit a low of $9,937/mt near the close, eventually closing at $9,951.5/mt, down 0.58%. Trading volume reached 13,000 lots, and open interest stood at 282,000 lots. Overnight, the most-traded SHFE copper 2508 contract opened at and hit a low of 80,460 yuan/mt, then dropped to a low of 80,370 yuan/mt shortly after the opening. It subsequently rose and hit a high of 80,760 yuan/mt, fluctuating downward during the session, and rebounded slightly near the close to eventually close at 80,540 yuan/mt, down 0.27%. Trading volume reached 28,000 lots, and open interest stood at 223,000 lots. On the macro front, data released by the US Department of Labor on Thursday showed that non-farm payrolls increased by 147,000 in June. As a result, expectations for US Fed interest rate cuts declined significantly, and the US dollar rose, putting pressure on copper prices. Meanwhile, US Treasury Secretary Bessent warned countries not to extend trade negotiations, stating that if no progress is made, tariffs may revert to the levels of April 2, exacerbating market concerns. On the fundamental front, supply side, as it was Friday, there were arrivals of imported cargoes in the market, and overall supply was not tight. Demand side, downstream buyers were expected to remain cautious in procurement amid high copper prices. As of Thursday, July 3, SMM's nationwide copper inventories in major regions increased by 5,700 mt from Monday to 131,800 mt, and increased by 1,700 mt from Thursday last week. Weekly inventories first declined and then rose, currently standing 278,000 mt lower than the 4.098 million mt of the same period last year. On the price front, there is currently pressure on the upside of copper prices. In addition to the above factors, the US House of Representatives passed Trump's bill for significant tax cuts and increased government spending, which may increase inflationary pressures, especially given the strong signs in the economy, such as the latest employment report. Therefore, it is expected that there will be significant pressure on the upside of copper prices today.
