LME copper prices closed at $8,438/mt last Friday evening, down 0.23%. Trading volume was 14,000 lots and open interest stood at 271,000 lots. The most active SHFE 2308 copper contract finished at 68,380 yuan/mt overnight, down 0.36%. Trading volume was 24,000 lots and open interest stood at 152,000 lots.
On the macro front, the Federal Reserve and the European Central Bank will hold meetings this week, and market transactions are more cautious before the Fed meeting. The US dollar index fluctuated higher, which was negative for copper prices. As of Friday July 21, SMM data showed that copper inventory across major Chinese markets stood at 115,900 mt, down 9,500 mt from last Monday and down 1,100 mt from two Fridays ago. Inventories have fallen for two consecutive weeks.
The decrease in inventory in east China is mainly due to the low arrivals of imported copper and the increase in downstream stockpiling. In south China, both supply and demand were weak. Shipments from smelters were scarce after delivery and imports of copper were also limited. In terms of consumption, downstream demand is expected to decrease towards the end of the month. Copper prices are expected to remain rangebound as the market is awaiting the opening of the Fed’s meeting.