Night session copper prices' center slightly lifted, intertwined with geopolitical risks and policy expectations [SMM copper morning comment]

SMM, Aug 11 – Overnight, LME copper opened at $14,122.5/mt, drifted lower in early trading to touch a low of $14,069/mt, then the copper price center gradually moved up to hit $14,177/mt, subsequently drifted lower again to finally settle at $14,120/mt, up 0.7%. Trading volume reached 15,000 lots, and open interest stood at 259,000 lots, up 1,164 lots from the previous trading day, reflecting long accumulation. Overnight, the most-traded SHFE copper 2609 contract opened at 107,850 yuan/mt, drifted lower in early trading to dip to 107,450 yuan/mt, then the copper price center moved up sharply to touch a high of 108,060 yuan/mt, eventually closing at 107,790 yuan/mt, up 0.16%. Trading volume reached 27,400 lots, and open interest stood at 212,000 lots, down 2,287 lots from the prior trading day, reflecting short covering. On the macro front, US Fed official Hammack said multiple rate hikes may be needed to bring down inflation, and Trump denied frequent calls with Warsh. In the Middle East, Iran discussed establishing safe shipping routes with Oman, with no transit fees involved; as Iran raised the issue of war compensation, Trump also said he would claim compensation and incorporate it into negotiations; Iran’s supreme leader made new personnel appointments, and Trump claimed the US military actually controls the Strait of Hormuz and has cleared mines. Overall, while the Middle East conflict has been recurring, expectations for rate hikes have diminished somewhat, providing some bullish support for copper prices. On the fundamental side, the supply end was affected by a typhoon, which reduced cargo flow efficiency, with high-quality copper being scarce while non-registered copper was relatively ample, leaving overall supply tight but with clear structural divergence among brands; the demand side was subdued by high copper prices, depressing downstream purchases, and overall performance remained weak. The supply-demand weakness persisted. On the inventory side, as of Monday, August 10, SMM copper inventories across major regions in China declined by 900 mt WoW to 118,000 mt, with total inventories down 13,600 mt from 131,600 mt a year earlier. In summary, copper prices are expected to drift higher today.