Global Market Panic Spreads, Copper Prices Plummet [SMM Copper Morning Comment Aug 6]

Overnight, LME copper opened at $8,888/mt, initially dropped to $8,714/mt, then rebounded during the session, approaching $8,960/mt near the end of the trading session, and finally closed at $8,854.5/mt, down 2.56%. Trading volume reached 46,000 lots, and open interest was 291,000 lots.
Overnight, the most-traded SHFE copper 2409 contract opened at 70,800 yuan/mt, initially dipped to 70,630 yuan/mt, then rose during the session, reaching 71,690 yuan/mt, and finally closed at 71,300 yuan/mt, down 2.41%. Trading volume reached 105,000 lots, and open interest was 175,000 lots.

Macro side, global assets faced a "Black Monday" yesterday, with multiple stock markets experiencing circuit breakers. The sell-off sentiment in the stock markets also led to a sharp drop in copper prices. Fundamentals side, copper prices fell yesterday, but downstream consumption showed signs of recovery, and market trading activity increased. As of Monday, August 5, SMM national mainstream copper stocks increased by 100 mt from last Thursday to 348,500 mt, up 255,200 mt YoY from 93,300 mt. Additionally, due to the impact of Document No. 783, the supply of copper rod made from copper scrap saw a sharp drop, increasing the demand for copper cathode. In terms of prices, under the panic market sentiment, copper prices are expected to continue to run weakly.