Market Concerns About US Economic Recession Increased, Dragging Down Copper Prices [SMM Copper Morning Comment]

Last Friday evening, LME copper opened at $9,111.5/mt, rising at the start and peaking at $9,175.5/mt. It then fell all the way down, touching $8,952.5/mt near the close, and finally closed at $8,954/mt, down 1.61%. Trading volume was 18,000 lots, and open interest was 279,000 lots. Last Friday evening, the most-traded SHFE copper 2410 contract opened and peaked at 73,000 yuan/mt, then declined all the way, touching 71,780 yuan/mt near the close, and finally closed at 71,810 yuan/mt, down 1.07%. Trading volume was 55,000 lots, and open interest was 162,000 lots. Macroeconomically, the data released by the US last Friday was mixed. US non-farm payrolls increased by 142,000 in August, the largest gain since June. The unemployment rate ended a four-month increase and slightly dropped to 4.2%. Non-farm payrolls for June and July were revised down by a total of 86,000. After the release of this data, market concerns about a US economic recession increased. Major European stock indices all closed down, marking their worst performance since early August. This sentiment also offset the support for oil prices from OPEC and delayed supply increases, causing international oil prices to drop during the day, hitting their lowest level since June last year. Copper prices followed suit and declined. On the fundamental side, supply side, concentrated arrivals of imported cargoes led traders to actively sell, increasing the supply of copper cathode and putting spot premiums under pressure. Demand side, downstream buyers actively stocked up before the weekend, and with the Mid-Autumn Festival holiday approaching, the pace of downstream inventory buildup was tight, leading to an expected increase in consumption demand. Price-wise, last Friday's US non-farm payrolls data raised doubts about the US Fed's rate cut size this month. This Wednesday, the US will release the August CPI data, which may determine the size of the Federal Reserve's rate cut this time. Before this data is released, copper prices are expected to remain at low levels.