New York, October 16: Copper futures on the Chicago Mercantile Exchange (COMEX) rose on Monday, ending four consecutive days of declines, mainly due to the weakness of the U.S. dollar and infrastructure investment in China, the top metal consumer. Copper demand provides support.
As of the close, copper futures rose by 0.7 cents to 1.75 cents, with the most actively traded December 2023 copper futures closing at $3.582/lb, up 1.1 cents or 0.31% from the previous trading day.
December copper futures traded in a trading range of $3.5635 to $3.6055.
The U.S. dollar index fell on Monday, meaning copper priced in U.S. dollars is cheaper for buyers holding other currencies.
China's strong infrastructure investment is supporting metals demand, particularly in renewable energy, offsetting continued weakness in the property sector, Macquarie analysts said.
Data on Friday showed that the decline in China's exports slowed in September. China's copper imports hit a new high for the year in September.
Analysts pointed out that although the real estate industry remains sluggish, China's demand for copper and aluminum has been unexpectedly strong, mainly benefiting from orders from the home appliances, electric vehicles, solar and wind energy industries.
The recent COMEX copper futures contract has fallen 3.73% so far this month and 5.74% so far this year. Monday's closing price is still 3.81% higher than the same period last year. COMEX copper futures fell 14.6% in 2022, mainly because the global economic growth outlook is worrying. High inflation has prompted European and American central banks to actively raise interest rates to curb inflation, exacerbating the risk of economic recession. By comparison, copper in 2020 and 2021 has recorded gains of 25% for two consecutive years. The green transformation of the global economy and electrification have helped boost additional demand for this metal widely used in the power and construction industries, while copper mines are facing Disruptions such as underinvestment and production disruptions.
From the perspective of fund dynamics, position data released by the U.S. Commodity Futures Trading Commission (CFTC) shows that speculative funds have reduced their net short positions in the U.S. copper futures market for the second consecutive week. As of October 10, speculative funds held a net short position of 5,116 lots in the COMEX copper futures and options market, a decrease of 7,859 lots from a week ago. For comparison, there were net purchases of 8,245 lots last week.
The November 2023 copper contract on the Shanghai Futures Exchange closed up 200 yuan on Monday at 66,310 yuan per ton. December bonded copper futures on the Shanghai International Energy Trading Center (INE) rose 180 yuan to trade at 58,660 yuan.
In the registered warehouse of the Shanghai Futures Exchange, copper inventory was 56,894 tons last Friday (13th), an increase of 17,898 tons from 38,996 tons before the National Day. This is the first increase in three weeks and is still higher than the peak at the end of February. 252,455 tons was 77.5% lower.
On Monday, the trading volume of COMEX copper futures was 68,857 lots, compared with 75,549 lots on the previous trading day; the short volume was 215,863 lots, compared with 211,380 lots on the previous trading day.
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