SMM August 14: Overnight, LME copper opened at $8,957/mt, initially maintained slight fluctuations, then plunged to a session low of $8,895/mt, before climbing to a session high of $8,984/mt. It then fluctuated widely and finally closed at $8,978.5/mt, down 0.55%, with a trading volume of 18,000 lots and an open interest of 281,000 lots. Overnight, the most-traded SHFE copper 2409 contract opened at 72,200 yuan/mt, initially fell to a session low of 71,650 yuan/mt, then climbed to a session high of 72,410 yuan/mt, and finally closed at 72,310 yuan/mt, down 0.32%, with a trading volume of 47,000 lots and an open interest of 164,000 lots.
Macro side, the US July PPI dropped significantly from the previous value, increasing traders' bets on the US Fed relaxing policies, boosting confidence in a rate cut in September. LME inventories surged on Tuesday to the highest level in nearly five years, while concerns about domestic demand persisted, causing copper prices to fall again.
Fundamentals, supply side, approaching delivery, smelter shipments increased, and warrants continued to flow out. Demand side, copper prices rose again, leading to a slight cooling in consumption. Overall, the US Fed's rate cut expectations provided a boost, and copper prices are expected to remain strong and volatile before the release of the US July CPI. It is also worthy of attention that workers at BHP's Chilean copper mine began a strike on Tuesday morning after wage negotiations failed, which may impact the mine's production.
