Geopolitical conflicts combined with hawkish signals from the US Fed, overnight copper weakened both domestically and internationally [SMM copper morning comment]

SMM, September 2: Overnight LME copper opened at $14,240/mt, swung wildly in early trading to hit a high of $14,280/mt, then the price center fell sharply, dipping to $14,185/mt near the end of the session, and finally settled at $14,192.5/mt, down 0.65%. Trading volume reached 21,000 lots, and open interest stood at 265,000 lots, down 4,800 lots from the previous trading day, reflecting long liquidation. Overnight, the most-traded SHFE copper 2610 contract opened at 108,500 yuan/mt, with the price center falling sharply in early trading to a low of 108,150 yuan/mt, then drifting higher to touch 108,750 yuan/mt near the end of the session, and finally settling at 108,610 yuan/mt, down 0.83%. Trading volume reached 51,000 lots, and open interest stood at 217,000 lots, down 7,406 lots from the previous trading day, also reflecting long liquidation. On the macro front, US forces struck Iranian airfields and coastal areas along the strait, and Trump threatened to "totally obliterate" Iran if it retaliated. Iran responded with missile strikes and accused the US of violating the agreement, while two oil tankers were attacked in the Strait of Hormuz. The Russian and Iranian presidents met and noted the fragility of the ceasefire, the US Treasury Secretary said sanctions would be stepped up and "bypass routes" promoted, and the US Fed's Barr hinted that decisive rate hikes would be needed if inflation does not cool. Escalating geopolitical conflicts combined with hawkish signals strengthened the US dollar, putting copper prices under pressure. Fundamentals side, supply-side import cargoes are gradually arriving at ports, increasing available supply and making market supply marginally looser. Demand side, copper prices remain high and spot premiums have pulled back, with downstream users only making just-in-time procurement, providing limited actual demand support. Overall, copper prices are expected to consolidate on a subdued note in a narrow range today.