Low inventory supports copper prices, while off-season demand restricts upward movement [SMM BC Copper Commentary]

Today, the most-traded BC copper 2508 contract opened at 70,660 yuan/mt, closing the day with a positive candlestick as bears reduced their positions. During the night session, the most-traded BC copper contract initially dipped to a daily low of 70,540 yuan/mt before stabilizing and rebounding. The daytime session saw the continuation of the upward trend, with the contract touching a daily high of 70,900 yuan/mt. It eventually closed at 70,870 yuan/mt, up 100 yuan/mt from the previous close, representing a 0.14% increase. Open interest reached 5,001 lots, a decrease of 319 lots from the previous trading day, while trading volume amounted to 2,886 lots. On the macro front, the US implemented tariff policies starting from August 1, imposing a 25% tariff on goods from Japan and South Korea, and tariffs ranging from 25% to 40% on goods from Malaysia, Myanmar, Thailand, and other countries. Additionally, countries that ally with BRICS nations in anti-US policies face an extra 10% tariff. The US extended the suspension period for reciprocal tariffs via an executive order until August 1. While this temporarily eased trade tensions, market sentiment remained volatile due to expectations of the impact of high tariffs. From a fundamental perspective, overall spot copper inventory is currently at a relatively low level, providing support to copper prices. Against the backdrop of high copper prices and the arrival of the traditional consumption off-season, market demand has shown signs of weakening, limiting the upside room for copper prices.

The most-traded SHFE copper 2508 contract closed at 79,620 yuan/mt. If we consider the most-traded BC copper 2508 contract at 70,870 yuan/mt, its after-tax price would be 80,083 yuan/mt. The price spread between the SHFE copper 2508 contract and the BC copper contract is -463, indicating an inverted spread that has widened compared to the previous day.