Copper Prices Rebound Amid Global Economic Uncertainty
The copper market experienced wild fluctuations last Friday night on the London Metal Exchange (LME) and Shanghai Futures Exchange (SHFE). LME copper opened at $14,141/mt and rose to a high of $14,173/mt before plummeting to near the close at $14,006/mt. It ultimately settled at $14,022/mt, down 0.5%, with trading volume at 19,800 lots and open interest at 258,000 lots.
On the SHFE, the most-traded copper September contract opened at 108,010 yuan/mt and reached a high of 108,140 yuan/mt before dropping to near the close at 107,130 yuan/mt. It settled at 107,160 yuan/mt, down 0.8%, with trading volume at 45,000 lots and open interest at 215,000 lots.
The price movements were influenced by a mix of macroeconomic factors, including unexpectedly weak US July nonfarm payrolls data, which fell by 23,000, and the initiation of proceedings to remove Fed Governor Cook. Geopolitically, President Trump postponed military action against Iran, but stated that the Strait of Hormuz remains closed.
As a result of these factors, copper prices initially rose before pulling back under pressure. Fundamentally, supply-side constraints and weak demand due to off-season procurement have maintained tightness in the market, leading analysts to expect prices to drift higher today.