Strait Geopolitical Conflict Rekindles, Overnight LME Copper Retreats After Rapid Rise [SMM Copper Morning Comment]

SMM, July 8: Overnight, LME copper opened at $13,393/mt. Early in the session, the price center rose, hitting a high of $13,452/mt, before the center drifted lower, touching a low of $13,323/mt near the close. It eventually settled at $13,334.5/mt, down 0.57%. Trading volume reached 10,600 lots, and open interest stood at 247,000 lots, down 2,082 lots from the previous trading day, indicating long liquidation. Overnight, the most-traded SHFE copper 2608 contract opened at 103,080 yuan/mt. Early in the session, the price center climbed to 103,500 yuan/mt, then the center drifted lower throughout the session, touching a high of 102,880 yuan/mt near the close. It eventually settled at 103,100 yuan/mt, up 0.14%. Trading volume reached 24,400 lots, and open interest stood at 148,000 lots, down 854 lots from the previous trading day, indicating short covering. On the macro front, Iran was reported to have attacked a Qatari LNG tanker near the Strait of Hormuz, and the US immediately revoked waivers for Iranian oil sales. Meanwhile, multiple locations in southern Iran were again hit by US military strikes. Crude oil prices rose, and expectations for US Fed interest rate hikes strengthened, capping upside room for copper prices. In addition, the market was waiting for the US decision on a tariff hike on copper cathode, with strong wait-and-see sentiment among funds, keeping copper prices moving sideways in a narrow range. Fundamentals: On the supply side, arrivals of both imported and domestic cargoes remained low; coupled with typhoon disruptions, suppliers’ stockpiling and hold-prices-firm sentiment strengthened. On the demand side, elevated copper prices meant downstream buyers still mainly stockpiled to meet rigid demand. Overall, copper prices were expected to consolidate on a subdued note today.