Geopolitical Risks Continue to Intensify, Inflation Expectations Heat Up, Copper Futures under Short-Term Pressure [SMM Copper Morning Comment]

SMM, July 14 – Overnight, LME copper opened at $13,445/mt, initially drifted higher to touch $13,571/mt, then edged down to $13,474/mt before closing at $13,479/mt, down 0.04%. Trading volume was 21,000 lots, and open interest reached 247,000 lots, down 172 lots from the previous trading day, reflecting a reduction in long positions. Overnight, the most-traded SHFE copper 2608 contract opened at 103,910 yuan/mt, edged up to 104,290 yuan/mt in early trading, then drifted lower to touch 103,610 yuan/mt before closing at 103,700 yuan/mt, up 0.58%. Trading volume was 36,000 lots, and open interest stood at 143,000 lots, up 768 lots from the previous trading day, reflecting an increase in long positions. On the macro front, US Fed Governor Waller said that if core inflation heats up again this week, the FOMC will have to consider tightening monetary policy in the near term. On the geopolitical front, Trump said on Monday that tonight and tomorrow the US would carry out severe strikes against Iran, aiming to destroy its underground nuclear facilities, but also mentioned the possibility of reaching a deal. Multiple areas in Iran continued to be hit, with Iran responding by attacking US military facilities. Yemen’s Houthi rebels and Saudi Arabia exchanged attacks, and Yemen’s capital international airport was struck by airstrikes. Escalating geopolitical conflicts, combined with rising inflation expectations, are keeping copper prices under pressure in the short term. On the fundamental side, supply remained tight overall, with limited imports and domestic arrivals, resulting in little incremental supply. Demand side, performance was weak. After copper prices pulled back, downstream buyers mainly engaged in restocking for immediate needs, with low purchase willingness. As of Monday, July 13, SMM copper inventories across major regions in China fell by 52,200 mt WoW to 140,000 mt. Total inventories were down by 7,600 mt compared to the same period last year from 147,600 mt, with all regions showing destocking. Overall, copper prices are expected to drift lower today.