SunSirs: The Copper Morning Post of August 27th

Price trend

On the previous trading day, London copper opened at 9,137 US dollars/ton, peaked at 9,299.5 US dollars/ton, and closed at 9,298 US dollars/ton; Compared to the previous trading day, it rose by 178 US dollars/ton, an increase of 1.95%. The main copper contract in Shanghai closed at 74,960 RMB/ton, an increase of 620 RMB/ton or 0.83% from the previous trading day.

On a macro level, the initial value of the US Markit manufacturing PMI for August hit a nearly eight month low. Although the US economy has shown resilience, there has been a significant decline compared to before the interest rate hike. Market participants expect a high probability of a rate cut by the Federal Reserve at its September meeting, possibly reaching 100 basis points within the year. As September approaches, copper prices show strong support at low levels, supported by expectations of a rate cut.

From a fundamental perspective, with the significant drop in copper prices and potential reversal expectations, copper demand has significantly improved compared to before, and domestic refined copper social inventory has been maintained and reduced. In addition, the expectation of recovery during the peak season after the end of the high-temperature season also provides support for copper prices. From a technical perspective, the main contract for Shanghai copper was under intraday pressure at the line of 75,490 RMB/ton, with overnight support around the 74,270 RMB/ton.

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