Cooling rate hike expectations boost market sentiment, copper futures trend firmer [SMM Copper Morning Comment]

SMM July 15: Overnight, LME copper opened at $13,633/mt, edged down to $13,581/mt in early trading, then rose to touch a high of $13,707.5/mt before closing at $13,600/mt, up 0.90%. Trading volume was 21,000 lots, and open interest stood at 243,000 lots, down 3,933 lots from the previous trading day, driven by short covering. Overnight, the most-traded SHFE copper 2608 contract opened at 104,700 yuan/mt, edged up to 105,140 yuan/mt in early trading, then drifted lower to touch a low of 104,540 yuan/mt before finally closing at 105,140 yuan/mt, up 0.28%. Trading volume reached 31,000 lots, and open interest came to 144,000 lots, down 783 lots from the previous trading day, reflecting short covering. On the macro front, the US June unadjusted CPI YoY growth slowed to 3.5%, and the seasonally adjusted MoM figure recorded -0.4%, the first decline in six years, cooling rate hike expectations. Geopolitically, tit-for-tat strikes between the US and Iran continued, and the US military resumed its maritime blockade of Iran at 4 a.m. Trump said only Iranian maritime shipments would be blockaded, and a trade and investment agreement with Gulf states could replace 20% of toll fees; if an agreement cannot be reached before next week, the US would strike Iranian power plants. Iran stated that the US had entered a state of formal war, and the deputy foreign minister said there was currently no commitment to any memorandum of understanding. With Middle East tensions persisting and rate hike expectations fading, copper prices rose. On the fundamental side, the supply tightness remained unchanged, with arrivals of both domestic and imported materials still low; the demand side was weak, end-users lacked buying power, and purchases were mainly for restocking of rigid demand. Overall, copper prices are expected to edge up in a narrow range today.