The most-traded BC copper futures contract closed lower with a 0.51% decline amid a strengthening US dollar and rising inventory, putting pressure on prices [SMM BC Copper Commentary]

Today, the most-traded BC copper 2509 contract opened at 70,410 yuan/mt and closed in the red. During the night session, the most-traded BC copper 2509 contract initially rose, touching an intraday high of 70,460 yuan/mt. Subsequently, the center of copper prices gradually shifted downward, reaching a low of 69,900 yuan/mt. During the day session, copper prices fluctuated considerably and ultimately closed at 70,150 yuan/mt, marking a decline of 0.51%. Open interest reached 3,092 lots, an increase of 281 lots from the previous trading day, with trading volume reaching 3,485 lots. On the macro front, supported by robust economic data, the US dollar strengthened, with the US dollar index rebounding for the second consecutive trading day. This trend exerted pressure on copper prices. Regarding tariffs, Trump revealed that the US had reached a tariff agreement with the EU at a rate of 15%, and was also considering advancing similar agreements with three to four other countries. The market generally believes that these optimistic signals in the trade sector are expected to limit the downside room for copper prices. On the fundamental side, as of July 28, SMM copper inventories in major regions across China rose by 6,100 mt WoW to 120,300 mt, primarily due to the arrival of imported and domestically produced cargoes combined with weakening demand.

The SHFE copper 2509 contract closed at 79,000 yuan/mt. If we consider the most-traded BC copper 2509 contract at 70,150 yuan/mt, its after-tax price is 79,269 yuan/mt. The price spread between the SHFE copper 2509 contract and the BC copper contract is -269, indicating an inverted spread that has widened compared to the previous day.