BC copper closes higher with a slight gain, as expectations of an interest rate cut heat up, boosting copper prices [SMM BC Copper Commentary]

Today, the most-traded BC copper 2509 contract opened at 69,600 yuan/mt and closed with a positive daily candle. During the night session, the most-traded BC copper 2509 contract fluctuated upward at the beginning, touching an intraday high of 69,640 yuan/mt. Subsequently, the center of copper prices gradually shifted downward, reaching a low of 69,190 yuan/mt. After the day session opened, copper prices gradually rebounded, ultimately closing at 69,490 yuan/mt, marking a 0.12% increase. The open interest stood at 4,756 lots, a decrease of 158 lots from the previous trading day, with trading volume reaching 3,629 lots. On the macro front, the US added only 73,000 jobs in July, and the ISM manufacturing PMI fell to 48 during the same period, which has increased market expectations for an interest rate cut in September. On the fundamental front, LME inventories decreased by 2,175 mt MoM to 139,575 mt. As of August 4, SMM copper inventories in major regions across China increased by 16,600 mt WoW to 135,900 mt. This was primarily due to an increase in imports and domestic arrivals, while demand was suppressed by rising copper prices, significantly inhibiting downstream enterprises' purchase willingness. This resulted in a situation of loose supply and weak demand.

The most-traded SHFE copper 2509 contract closed at 78,330 yuan/mt. If we consider the most-traded BC copper 2509 contract price of 69,490 yuan/mt, its after-tax price is 78,523 yuan/mt. The price spread between the SHFE copper 2509 contract and the BC copper contract is -193, indicating an inverted spread that has widened compared to the previous day.