As the rate-setting meeting approaches, the market turns cautious, while geopolitical disturbances cap the upside room for copper prices [SMM Copper Morning Comment]

SMM July 29: Overnight, LME copper opened at $13,613/mt, dipped to a low of $13,597.5/mt at the beginning of the session, then rose to a high of $13,700/mt, and finally fell to close at $13,644.5/mt, posting a decline of 0.84%. Trading volume reached 14,000 lots, and open interest reached 247,000 lots, down 758 lots from the previous trading day, reflecting long position reductions. Overnight, the most-traded SHFE copper 2609 contract opened at 104,560 yuan/mt, dipped to 104,460 yuan/mt at the open, then the price center rose to touch a high of 105,120 yuan/mt near the end of the session, and finally closed at 104,940 yuan/mt, a loss of 0.1%. Trading volume was 26,000 lots, and open interest was 201,000 lots, down 23.48 million lots from the previous trading day, reflecting short position reductions. On the macro front, although the US-Iran conflict is temporarily easing, risks of repeated geopolitical conflicts persist. Additionally, the market is widely focused on the US Fed meeting outcome on Wednesday, with strong wait-and-see sentiment among funds. Copper prices maintained a consolidation pattern. On the fundamental front, the supply side shows structural differentiation: suppliers with cargoes with invoices dated next month have strong willingness to sell, making market supply relatively loose, while cargoes with invoices dated this month are relatively tight. The demand side benefited from the phased pullback in copper prices, and downstream purchasing enthusiasm rebounded somewhat. Overall, pressured by expectations for US Fed interest rate hikes, today’s copper prices are expected to move sideways on a subdued note.