The most-traded BC copper contract closed down 0.76% amid macro risk aversion and loose supply and demand [SMM BC Copper Commentary]

Today, the most-traded BC copper contract opened at 70,560 yuan/mt with a short position of 508 lots, closing the day with a bearish candle. During the night session, the most-traded BC copper contract fluctuated considerably, touching a high of 70,650 yuan/mt early on. It then fluctuated downward and, after the day session opened, maintained a wide range of fluctuation again. Near the end of the session, it dropped to the intraday low of 70,200 yuan/mt, ultimately closing at 70,360 yuan/mt, marking a 0.76% decline. Open interest reached 3,345 lots, a decrease of 534 lots from the previous trading day, with trading volume reaching 4,696 lots. On the macro side, the EU's 93 billion-euro retaliatory tariff list against the US may be implemented on August 7, and there are also uncertainties in the progress of trade negotiations between India and the US, as well as between India and the UK, exacerbating market risk-aversion sentiment. The escalation of the Thai-Cambodian conflict led to Thailand's airstrikes on Cambodia, pushing up the overnight US dollar index. The political turmoil surrounding the US Fed's interest rate cut continues to disrupt the market. On the fundamental side, LME inventory increased by 3,700 mt to 128,475 mt. On the demand side, the off-season effect continues to intensify, coupled with sideways movement of copper prices in a high price range, suppressing downstream procurement enthusiasm. The current overall fundamental pattern is characterized by "loosening supply and weakening demand."

The SHFE copper 2508 contract closed at 79,250 yuan/mt. If based on the most-traded BC copper 2508 contract price of 70,360 yuan/mt, its after-tax price would be 79,506 yuan/mt. The price spread between the SHFE copper 2508 contract and the BC copper contract is -256, maintaining an inversion and decreasing from the previous day.