Futures market: LME copper opened at $9,940/mt (the session high) overnight, then fluctuated downward with the price center gradually declining to touch a low of $9,848/mt before closing at $9,854.5/mt after considerable fluctuations, down 0.8%. Trading volume reached 14,000 lots, and open interest stood at 267,000 lots. The most-traded SHFE copper 2509 contract opened at 79,520 yuan/mt overnight, initially fluctuating downward to hit a low of 79,180 yuan/mt before rebounding to a high of 79,550 yuan/mt, then closing at 79,290 yuan/mt after fluctuating downward, down 0.69%. Trading volume reached 39,000 lots, and open interest stood at 177,000 lots.
[SMM Copper Morning Briefing] News: (1) The US preliminary July Markit Manufacturing PMI dropped to 49.5, hitting the lowest level since December 2024 and marking the first contraction since last December, significantly below the expected 52.7 and the previous 52.9. The monthly decline of 3.4 points in the manufacturing PMI was the largest in three years. The preliminary new orders index fell to 49.7, the lowest since last December, reversing the previous expansion trend.
(2) The ECB kept the main refinancing rate unchanged at 2.15%, the deposit facility rate at 2%, and the marginal lending rate at 2.4%, all in line with market expectations. The ECB stated it would adopt a data-dependent and meeting-by-meeting approach to determine the appropriate monetary policy stance, without pre-committing to any specific rate path.
Spot market: (1) Shanghai: On July 24, SMM #1 copper cathode spot prices against the front-month 2508 contract were at premiums of 90-200 yuan/mt, with the average at 145 yuan/mt, down 35 yuan/mt MoM. For today, delivery sentiment is expected to remain high, but downstream stockpiling for the weekend may narrow the decline in spot premiums.
(2) Guangdong: On July 24, Guangdong #1 copper cathode spot prices against the front-month contract ranged from discounts of 50 yuan/mt to premiums of 30 yuan/mt, averaging a discount of 10 yuan/mt, flat MoM. Overall, despite continuous inventory declines, weak premiums reflect poor downstream demand.
(3) Imported copper: On July 24, warrant prices were $44-54/mt (QP August), flat MoM; B/L prices were $56-76/mt (QP August), flat MoM; EQ copper (CIF B/L) was $22-36/mt (QP July), flat MoM. Offers referred to cargoes arriving in late July and early August. Overall, both buyers and sellers showed significantly weaker transaction willingness.
(4) Secondary copper: On July 24, recycled copper raw material prices rose 100 yuan/mt MoM. Guangdong bare bright copper prices were 73,700-73,900 yuan/mt, up 100 yuan/mt from the previous trading day. The price difference between copper cathode and copper scrap stood at 1,304 yuan/mt, down 132 yuan/mt MoM. The price difference between copper cathode rod and secondary copper rod stood at 1,110 yuan/mt. According to the SMM survey, as copper prices rebounded, suppliers' willingness to release goods recovered. Secondary copper rod enterprises barely maintained normal production with their raw material procurement volume, but persistent sales losses meant their continued operation was primarily driven by annual output target requirements. Failure to meet annual output targets would affect enterprises' yearly profits.
(5) Inventories: On July 24, LME copper cathode inventories decreased by 50 mt to 124,775 mt, while SHFE warrant inventories increased by 648 mt to 16,183 mt.
Prices: Macro-wise, the EU's $93 billion retaliatory tariff list against the US may take effect on August 7, and uncertainties remain in India-US and India-UK trade negotiations, exacerbating market risk-off sentiment. Escalating Thailand-Cambodia conflicts led to Thai airstrikes on Cambodia, pushing up the overnight US dollar index. Political turmoil over the US Fed's interest rate cuts continued to unsettle markets. Fundamentally, supply and demand both weakened, with reduced import and smelting arrivals causing mainstream national inventories to drop by 4,400 mt to 114,200 mt. Demand side, high copper prices suppressed downstream procurement sentiment, weakening demand. With unresolved trade frictions and geopolitical risks, copper prices are expected to encounter resistance today.
[Data source statement: Except for publicly available information, other data are derived from SMM's internal database model based on public information and market exchanges, processed by SMM for reference only and not constituting decision-making advice.]
[The above information is based on market collection and comprehensive evaluation by the SMM research team. The provided content is for reference only. This article does not constitute direct investment research advice. Clients should exercise caution in decision-making and not use it as a substitute for independent judgment. Any decisions made by clients are unrelated to SMM.]
