Domestic Demand Concerns Weigh on Copper Prices Overnight [SMM Copper Morning Review]

Overnight, LME copper opened at $9,645/mt, initially dropped to a session low of $9,587/mt, then fluctuated upwards, reaching a session high of $9,696.5/mt at the end of trading, and finally closed at $9,693.5/mt, with a decrease of 0.81%. Trading volume reached 20,000 lots, and open interest reached 333,000 lots. Overnight, the most-traded SHFE copper contract (2407) opened at 78,030 yuan/mt, initially dropped to a session low of 77,890 yuan/mt, then maintained an upward trend throughout the session, reaching a session high of 78,590 yuan/mt, and finally closed at 78,510 yuan/mt, with a decrease of 0.47%. Trading volume reached 34,000 lots, and open interest reached 166,000 lots. On the macro front, US Fed officials emphasized continued reliance on data, stating that bringing inflation down to the Fed's target is a long process, putting slight pressure on copper prices. Domestically, the NBS announced that the value-added of industrial enterprises above designated size increased by 5.6% YoY in May, and the total retail sales of consumer goods increased by 3.7% YoY in May. Meanwhile, an NBS spokesperson stated that since mid-May, there have been some positive changes in the real estate market, which is still in the adjustment process. It is expected that China's CPI will continue to rise moderately in the future, and the YoY decrease in PPI will continue to narrow. On the fundamentals, on the supply side, overall arrivals decreased over the weekend. On the consumption side, as the delivery date approaches, most sellers have started quoting next month's prices, but only a few downstream producers are restocking at lower prices, with no significant improvement in demand. As of Monday, June 17, SMM national mainstream copper stocks decreased sharply by 27,700 mt from last Thursday to 401,600 mt, rapidly declining from the year's high. Overall, market concerns about weak domestic demand may lack support for copper prices.