With Mixed US Employment Data, Domestic Positive News Supported Copper Prices [SMM Morning Comment]

LME copper opened at $9,015/mt overnight, initially dipping to $9,006/mt, then rising throughout the session to a high of $9,158/mt. It slightly retreated towards the end, closing at $9,100.5/mt, up 1.51%. Trading volume reached 23,000 lots, and open interest was 279,000 lots. The most-traded SHFE copper 2410 contract opened at 72,310 yuan/mt, initially dipping to 72,240 yuan/mt, then rising throughout the session to a high of 73,050 yuan/mt. It slightly retreated towards the end, closing at 72,610 yuan/mt, up 0.92%. Trading volume reached 64,000 lots, and open interest was 164,000 lots. Macro-wise, US employment data was mixed. August ADP employment increased by 99,000, below expectations and marking the smallest gain since January 2021. However, initial jobless claims for the week ending August 31 were lower than expected. The US dollar index weakened amid concerns, which supported copper prices. Domestically, according to news on September 5, the China-Africa Cooperation Forum - Beijing Action Plan (Summary) indicated that the Chinese government is willing to provide 360 billion yuan in funding over the next three years, offering new energy technology and products, and implementing 30 clean energy and green development projects, which may lead to an optimistic demand outlook. Additionally, the central bank indicated that there is still room for RRR cuts, providing further support for copper prices. On the fundamentals, the price spread between front-month and next-month contracts remained stable and evened out at times. Sellers increased their shipments, and there were recent arrivals of imported copper. With stable copper prices, overall consumption remained steady with slight growth. As of Thursday, September 5, SMM national copper stocks in major regions decreased by 8,900 mt to 255,700 mt, and by 23,400 mt compared to last Thursday, marking nine consecutive weeks of destocking, with the destocking speed accelerating to result in a new low in inventory since February. In summary, last night's data was mixed, with ongoing concerns about economic recession. However, domestic demand showed some improvement, and positive news was announced, providing some support for copper prices today.