COMEX Copper Roundup for October 18

New York, October 18: Copper futures on the Chicago Mercantile Exchange (COMEX) rose on Wednesday, mainly because economic growth in China, the top metal consumer, exceeded expectations, boosting market sentiment. However, the strong U.S. dollar exchange rate and tense geopolitical situation have restricted the rise in copper prices.

As of the close, copper futures rose by 0.2 cents to 0.85 cents, with the most actively traded December 2023 copper futures rising by 0.85 cents or 0.24% to close at $3.587 per pound.

December copper futures traded in a trading range of $3.575 to $3.6305.

China announced on Wednesday that its third-quarter economic growth reached 4.9%, exceeding the average investment bank forecast of 4.4%. China's economic growth reached 5.2% in the first three quarters of this year, laying the foundation for achieving the full-year growth target of 5%. This also prompted a number of investment banks to raise their forecasts for China's economic growth on Wednesday.

At the same time, concerns about the Federal Reserve raising interest rates again and rising geopolitical risks pushed the U.S. dollar exchange rate to rise for the second consecutive day, which put pressure on copper futures quoted in U.S. dollars. Federal Reserve Chairman Powell will give a speech on Thursday, and investors are looking forward to a better understanding of the Fed's path to raising interest rates in the future.

Investors are also paying attention to the situation in the Middle East. An attack on a hospital in Gaza resulted in the death of hundreds of Palestinian civilians, raising concerns about the possible spread of conflicts in the Middle East and exacerbating investors' risk aversion.

The recent COMEX copper futures contract has fallen 3.86% so far this month and 5.87% so far this year. The closing price on Wednesday was 6.59% higher than the same period last year, but it is still 27.33% lower than the historical peak of $4.929 set in March 2022, because The high interest rate environment brought about by aggressive interest rate hikes in major Western economies has suppressed economic growth and commodity demand, and China's economic performance has been weaker than earlier expectations.

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.

On Wednesday, the Shanghai Futures Exchange's November 2023 copper contract closed up 570 yuan at 66,390 yuan per ton. November bonded copper futures on the Shanghai International Energy Trading Center (INE) rose 590 yuan to 58,840 yuan per ton.

On Wednesday, the trading volume of COMEX copper futures was 81,790 lots, compared with 96,088 lots on the previous trading day; the short volume was 220,619 lots, compared with 218,744 lots on the previous trading day.