Copper Prices Rose Ahead Of Fed Meeting

LME copper closed at $8,660/mt in overnight trading, a gain of 1.58%. Trading volume was 22,000 lots and open interest stood at 270,000 lots. The most active SHFE 2309 copper contract prices finished at 69,230 yuan/mt overnight, up 0.82%. Trading volume was 38,000 lots, and open interest stood at 181,000 lots.

On the macro front, the US consumer confidence index rose to a two-year high in July, the labor market continued to be tight and inflation subsided, boosting the short-term economic outlook. Still, the economy is not out of the woods, with a survey by the World Enterprise Institute on Tuesday offering mixed signals. Consumers remain concerned about a recession next year after the Federal Reserve sharply raises interest rates. In terms of fundamentals, copper prices rose yesterday, downstream demand was already weak towards the end of the month, and the spot market in East China was less active. In addition, there will not be many imported goods in the near future, and the social inventory is low. It is expected that the spot discount will not continue to decline in the near term. South China is also suppressed by high copper prices, and the downstream demand is weak. Although the sellers sold at lower prices, the overall purchasing interest is still low.

Consumption can hardly recover in the near future. In terms of prices, the contradictory economic data in the United States made the market sentiment unstable, and more attention was paid to the follow-up speeches of Fed officials. Before that, copper prices will remain volatile.

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