Group 1: Macroeconomic Headwinds - The market is increasingly concerned about "stagflation" in the U.S. economy, with the services PMI nearing the threshold and the price index soaring to 69.9%, a three-year high [2] - Investors are selling industrial metals like copper in favor of safe-haven assets such as gold and government bonds due to fears of stagnant growth and high inflation [2] Group 2: Tariff Policy Impact - The tariff policy from the Trump administration has targeted the copper supply chain, imposing a 50% tax on semi-finished products like copper cables while exempting refined copper [3] - This has led U.S. wire importers to cancel orders and forced Chinese copper processing companies to relocate to Southeast Asia to avoid high tariffs [3] Group 3: Federal Reserve Uncertainty - The sudden announcement of changes in the Federal Reserve's leadership has raised concerns about potential delays in interest rate cuts, prompting copper bulls to exit the market [4] - This uncertainty has contributed to increased market volatility and further depressed copper prices [4] Group 4: Inventory Dynamics - LME copper inventories surged by 14,275 tons (10.23%) on August 5, reaching a five-month high, primarily due to U.S. traders selling off during the tariff exemption window [7] - In contrast, the Chinese market is experiencing a shortage of copper, with significant price discrepancies between regions, indicating an underlying inventory crisis [7] Group 5: Industry Chain Challenges - Copper concentrate processing fees have dropped to -42.09 USD/ton, resulting in losses for smelters [8] - The cost of production for Chilean copper has risen to 2.10 USD/pound, while smelters are struggling to maintain profitability [8] Group 6: Market Reactions - On August 6, stocks of copper companies like Tongling Nonferrous and Jiangxi Copper saw significant price increases, driven by speculation around policy expectations [9] - However, futures markets remain focused on real inventory levels and weak consumption, leading to narrow trading ranges for copper contracts [9] Group 7: Long-term Outlook - Despite short-term challenges, the demand for copper driven by electrification remains strong, with Tesla's Shanghai factory increasing copper cable orders by 35% year-on-year [10] - Strategic stockpiling activities by various entities, including the Chinese state reserves and U.S. military contractors, are also noteworthy [10] Group 8: Conclusion - The short-term fluctuations in copper prices are influenced by a complex interplay of macroeconomic factors, tariff policies, supply chain dynamics, and market expectations [12] - The future trajectory of copper prices will depend on the resolution of these interrelated factors [12]

Report Investment Rating No information provided on the industry investment rating. Core View The copper market may continue its low-level oscillation in the next 1 - 2 weeks. The contradiction between stable domestic smelting capacity release and tight overseas LME inventory on the supply side, combined with the deepening off - season and high copper prices suppressing procurement on the demand side, makes it difficult for orders in the construction and electronics sectors to support prices. Macroeconomic factors such as the repeated expectations of the Fed's interest rate cuts and the weak domestic economic recovery also suppress the valuation of commodities [3]. Summary by Directory 1. Daily Market Summary - **Market Data Changes**: On July 8, the SHFE copper main contract closed at 79,510 yuan/ton, up 0.13% from the previous trading day. The basis weakened significantly, with the premium of flat - copper dropping from 80 yuan/ton on July 2 to 55 yuan/ton, and the premium/discount of wet - copper widening from - 5 yuan/ton to - 40 yuan/ton. The LME (0 - 3) premium fell to 79.8 dollars/ton. The SHFE copper's inter - month BACK spread narrowed from 250 yuan/ton to 190 yuan/ton. The LME copper's open interest decreased by 3,072 lots to 281,488 lots on July 7, and the SHFE inventory increased to 102,500 tons in a single week [1]. - **Supply - Demand and Inventory Changes**: On the supply side, domestic supply remained stable with high utilization of smelting capacity, while overseas LME inventory decreased continuously. On the demand side, the off - season effect deepened, with weak demand in the power and electronics sectors. The copper cable operating rate was 72.41% with a 7.52% increase in finished product inventory, and the copper strip processing fee collapsed. The operating rates of various industries were expected to decline further in July. On the inventory side, the inventory differentiation intensified, with the continuous decline of LME inventory possibly reflecting European restocking demand, while the SHFE inventory exceeded 100,000 tons due to weak domestic consumption [2]. - **Market Conclusion**: The copper market may continue its low - level oscillation in the next 1 - 2 weeks due to the supply - demand contradiction and macro - level factors [3]. 2. Industrial Chain Price Monitoring - **Price Data**: On July 8, 2025, the SMM:1 copper price was 79,910 yuan/ton, down 0.09% from July 7. The premium of premium copper was 115 yuan/ton, down 8.00%. The premium of flat - copper was 55 yuan/ton, down 21.43%. The premium/discount of wet - copper was - 40 yuan/ton, down 300.00%. The LME (0 - 3) was 51 dollars/ton, down 35.70%. The SHFE price was 79,510 yuan/ton, up 0.13%. The LME price was 9,665 dollars/ton, down 1.22% [5]. - **Inventory Data**: The LME inventory was 19,109 tons, down 11.87% from July 7. The SHFE inventory was 102,500 tons, up 5.24%. The COMEX inventory was 221,788 short tons, up 0.15% [5]. 3. Industrial Dynamics and Interpretation - **Enterprise Projects**: On July 2, China Copper Industry established a mining research institute. Northern Copper's calendered copper foil production capacity is 5000 tons/year [6]. - **Industry Operating Rates**: In June, the operating rate of SMM copper cable enterprises decreased by 9.27% month - on - month to 72.41%, and is expected to drop to 71.98% in July. The copper strip processing fee declined significantly, and the operating rate in June was 67.44%, expected to drop to 63.44% in July [6]. 4. Industrial Chain Data Charts The report includes charts on China PMI, US PMI, US employment, the correlation between the US dollar index and LME copper price, the correlation between US interest rates and LME copper price, TC processing fees, CFTC copper open interest, LME copper net long positions, SHFE copper warehouse receipts, LME copper inventory changes, COMEX copper inventory changes, and SMM social inventory [7][9][13][16][18][22][23][26][27].