Domestic and international copper swung wildly in the night session, with weak US employment and the Fed’s tapering signal [SMM copper morning comment]

SMM July 2: Overnight, LME copper opened at $13,120/mt, slipped to a low of $13,103.5/mt in early trading, then its center drifted higher to test $13,364/mt, followed by wild swings and eventually settled at $13,330.5/mt, down 0.37%. Trading volume reached 23,000 lots, and open interest stood at 242,000 lots, down 3,122 lots from the previous session, reflecting long liquidation. Overnight, the most-traded SHFE copper 2608 contract opened at 101,830 yuan/mt, dipped to 101,640 yuan/mt in early trading, then its center shifted straight up to test 102,930 yuan/mt, followed by wild swings and settled at 102,520 yuan/mt, up 0.07%. Trading volume reached 50,000 lots, while open interest was 154,000 lots, down 286 lots from the previous session, reflecting short covering. On the macro front, US June ADP employment rose by 98,000 jobs, below expectations, signaling a cooling labor market. Fed Chairman Warsh said inflation expectations had declined, that the dot plot would be retained in the near term, and that he clearly favored balance sheet reduction. In the Middle East, Qatar said progress had been made on a memorandum, Iran expanded oil exports and used unfrozen funds to purchase supplies, the Doha agreement released $3 billion, and the US urged it to drop toll collection plans. Interwoven by bullish and bearish factors, overnight copper prices moved sideways. In fundamentals, on the supply side, shipments were limited, low-priced supply was scarce, and overall supply remained tight. On the demand side, downstream users continued to wait and see, with demand showing weakness. Overall, copper prices are expected to drift higher today.