LME copper prices closed at $8,448.5/mt overnight, a gain of 0.67%. Trading volume was 16,000 lots and open interest stood at 284,000 lots. SHFE 2309 copper contract prices finished at 68,370 yuan/mt last evening, a rise of 0.15%. Trading volume was 46,000 lots, and open interest stood at 167,000 lots.
On the macro front, the latest inflation report released by the U.S. Department of Labor showed that due to the fall in commodity prices, the U.S. CPI rose by 3.2% year-on-year in July without seasonal adjustment. In addition, after US President Biden signed an executive order on "investment restrictions in China", British Prime Minister Sunak considered following Biden to restrict technology investment in China. In terms of fundamentals, the performance of copper prices stabilized yesterday, and the enthusiasm for downstream purchases was also high. However, with the gradual digestion of imported copper, the supply of goods that can be circulated in east China has tightened again, and the spot premiums rebounded.
In south China, due to the increase in the volume of arrivals, the inventory has increased significantly, and the sellers lowered prices. If the discount continues, some sellers may choose to directly deliver cargoes to warehouses. In terms of consumption, if copper prices remain stable, it is expected that the recent improvement in demand can be maintained. Due to the influence of macro sentiment, copper prices will have limited downside room in the near future.
