SMM Copper Market Morning Comment (Aug 2)

Overnight, LME copper opened at $9,112/mt. Initially, it moved higher amid fluctuations, reaching a session high of $9,185/mt. It then declined, hitting a session low of $8,986.5/mt at the end of the trading session. It slightly fluctuated around $9,210/mt before finally closing at $9,002.5/mt, down 2.57%. Trading volume reached 26,000 lots, and open interest was 290,000 lots. Overnight, the most-traded SHFE 2409 copper contract opened at 74,510 yuan/mt. Initially, it moved higher, reaching a session high of 74,840 yuan/mt. It then declined amid fluctuations, hitting a session low of 73,670 yuan/mt at the end of the trading session, and finally closed at 73,740 yuan/mt, down 1.61%. Trading volume reached 76,000 lots, and open interest was 183,000 lots. Macro-wise, despite the US Fed hinting at a possible rate cut in September, concerns about domestic demand persisted. Recent data shows that China's manufacturing data fell below the 50 mark, with July manufacturing data marking the first contraction in nine months, deepening market concerns and causing copper prices to decline further. Fundamentally, with the start of long-term orders in August, traders' demand for delivery has increased. Additionally, the implementation of the Fair Competition Review Regulations on August 1 has begun to show the substitution effect between copper cathode and copper scrap. Copper cathode social inventory continued to fall. As of Thursday, August 1, SMM copper stocks in major regions nationwide decreased by 2,800 mt from Monday to 348,400 mt, and by 9,100 mt from the previous Thursday, marking the fourth consecutive week of weekly destocking. Overall, the market is looking forward to the implementation of economic stimulus policies, and copper prices are expected to remain weak today.