Tariff disturbances exert pressure, copper prices under pressure [SMM BC Copper Commentary]

Today, the most-traded BC copper 2508 contract opened at 71,060 yuan/mt and closed in the red, with bulls reducing their positions. During the night session, the most-traded BC copper contract initially surged to the day's high of 71,170 yuan/mt, before copper prices dropped back slightly. During the day session, it opened flat at 70,990 yuan/mt, with the price center gradually moving lower, touching a low of 70,380 yuan/mt near the close, and ultimately closing at 70,510 yuan/mt, down 920 yuan/mt or 1.29%. Open interest stood at 5,320 lots, a decrease of 184 lots from the previous trading day, with trading volume reaching 3,688 lots. On the macro front, Trump stated that he expected to send 12 or 15 tariff-related letters on Monday. If countries receiving these letters fail to reach agreements, tariffs will revert to April levels starting August 1. The uncertainty surrounding the US's potential restoration of tariffs on relevant countries has heightened concerns about international trade friction, leading to increased market risk aversion and copper prices coming under pressure. On the fundamental front, as of Monday, SMM's nationwide copper inventories in major regions increased by 11,100 mt WoW to 142,900 mt. The increase in imported copper arrivals, coupled with weak consumption, contributed to the inventory buildup, with copper prices encountering resistance above.

The most-traded SHFE copper 2508 contract closed at 79,270 yuan/mt. If we consider the most-traded BC copper 2508 contract at 70,510 yuan/mt, its after-tax price is 79,676 yuan/mt. The price spread between the SHFE copper 2508 contract and the BC copper contract is -406, with the spread remaining inverted but narrowing compared to the previous day.