Copper rebounded slightly as the US dollar fell due to slowing services data. LME copper prices closed at $8,328.5/mt overnight, a rise of 0.98%. Trading volumes were 18,000 lots and open interest stood at 250,000 lots. The most active SHFE 2307 copper contract finished at 66,640 yuan/mt overnight, up 0.89%. Trading volume was 57,000 lots and open interest stood at 186,000 lots.
On the macro front, data on Monday showed that the US services sector barely grew in May as new orders slowed, snapping an earlier rebound sparked by strong job growth. Weak growth in the US services sector has reinforced bets the Federal Reserve will keep interest rates on hold next week.
As of Monday June 5, SMM copper inventory across major Chinese markets stood at 106,900 mt, down 4,200 mt from last Friday and down 2,000 mt from the same period last year. Limited shipments arrivals of imported and domestic copper over the weekend and normal downstream purchasing lowered inventories in both east and south China. More imported copper will enter domestic market this week, while shipments arrivals of domestic copper will change little. The total supply will grow compared with last week. In terms of consumption, demand increased at the beginning of the month, but with high spot premiums, the increase is expected to be limited.
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