Non-farm payrolls missed expectations, easing rate hike concerns; domestic and overseas copper prices diverged in gains and losses [SMM copper morning comment]

SMM July 3: Overnight, LME copper opened at $13,256.5/mt, initially dipping to $13,240/mt, then drifting higher to hit a high of $13,398/mt. After that, the price center gradually shifted lower, eventually closing at $13,285.5/mt, down 0.34%, with trading volume of 14,800 lots and open interest of 250,000 lots, up 8,743 lots from the previous session, reflecting bearish position buildup. Overnight, the most-traded SHFE copper 2608 contract opened at 102,470 yuan/mt, initially drifting higher to test 102,960 yuan/mt, then the price center shifted lower and moved sideways, touching a low of 102,280 yuan/mt near the end of the session, finally closing at 102,410 yuan/mt, up 0.12%, with trading volume of 34,800 lots and open interest of 152,000 lots, down 3,155 lots from the previous session, reflecting bearish position reductions. On the macro front, signs of easing emerged in the Middle East situation, with the next round of US-Iran negotiations scheduled for July 18. Trump stated that Iran has essentially accepted all US demands. The US unemployment rate fell to 4.2% in June, but nonfarm payrolls added only 57,000, significantly below expectations. Moreover, data for the previous two months was revised down by a combined 74,000. The overall job market performance was weaker than expected, easing market expectations of a US Fed rate hike. Copper prices maintained a fluctuating trend. On the fundamentals front, supply side, arrivals of both imported and domestic sources decreased, keeping overall supply tight. Demand side, downstream buyers maintained just-in-time procurement, and demand showed signs of stabilizing. On the inventory front, as of Thursday, July 2, SMM data showed that copper inventories in major Chinese regions decreased by 6,100 mt WoW from last Thursday to 199,900 mt. Total inventories increased by 68,100 mt compared to 131,800 mt in the same period last year. Overall, copper prices are expected to drift higher today.