SMM morning comment on copper market July 25

LME copper opened at $8,382/mt overnight, with its low and high at $8,398/mt and $8,538/mt near the beginning and the end respectively before closing at $8,521/mt, up 1.04%. Trading volume was 17,000 lots and open interest was 270,000 lots.

The most-traded SHFE 2309 copper contract opened at 68,450 yuan/mt. After moving sideways at the beginning, its high reached over 68,770 yuan/mt before closing at 68,640 yuan/mt, up 0.69%. Trading volume was 35,000 lots and open interest was 160,000 lots. From a macro perspective, the U.S. announced a strong performance in manufacturing PMI on Monday, while the PMI fell back in service sector, and concerns about persistence of inflation remain. The market is focusing on the meetings of a number of central banks later this week for clues on the monetary policy. In terms of fundamentals, by this Monday, July 24, SMM copper stocks in national mainstream areas decreased by 6,900 mt to 109,000 mt compared to last Friday, but 11,500 mt higher than the same period last year. Specifically, East China inventory reduction is mainly caused by the low arrival of imported copper and the downstream replenishment at low price; South China inventory increase is mainly caused by more weekend arrival. For consumption, downstream demand will decline near the end of the month; if copper prices run high, consumption will continue to be suppressed. Copper prices will maintain great fluctuation before the Fed’s policy decision.

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