New York, May 18 news: Copper futures on the Chicago Mercantile Exchange (COMEX) closed lower on Thursday, giving up most of the previous session's gains, as the dollar strengthened.
As of the close, copper futures fell by 6.0 cents to 6.45 cents. Among them, the most actively traded July 2023 copper closed at $3.6895 per pound, down 6.5 cents or 1.73% from the previous trading day.
July copper traded in a range of $3.6805 to $3.7645.
This is also the second time that copper has fallen in the past three trading days.
The U.S. dollar rose to a seven-week high on Thursday, weighing on dollar-priced copper. ICE's U.S. dollar index was at 103.455 points, up 0.71% from Wednesday. The dollar is up 2% so far this month.
The reason for the dollar's rise was solid U.S. economic data and the market's expectations that the Federal Reserve will cut interest rates in the second half of the year have cooled.
The number of Americans filing new claims for jobless benefits fell more than expected last week, suggesting the U.S. labor market remains tight and justifying further interest rate cuts by the Federal Reserve to cool the economy and reduce inflationary pressures. Inflation does not appear to be cooling fast enough for the central bank to pause rate hikes, two Fed policymakers said on Thursday. Fed funds futures traders see a 64 percent chance the Fed will keep rates on hold at its June 13-14 meeting, compared with a 90 percent chance a week ago of a pause in rate hikes.
However, U.S. existing home sales fell for a second straight month in April, as high interest rates continued to weigh on the housing market. Markets were more divided on the prospect of U.S. rate hikes, analysts said.
The near-term COMEX copper contract is down 4.87% so far this month and 3.26% so far this year. Copper prices have erased all the gains made earlier in the year as China's economic growth slows and Western economies still face recession fears.
The closing price on Thursday was 14.08% lower than the same period last year, and 25.31% lower than the historical peak hit in March 2022. In contrast, COMEX copper futures fell by 14.58% in 2022, reflecting the worrying outlook for global economic growth. High inflation has prompted central banks in Europe and the United States to actively raise interest rates to curb inflation, while rising borrowing costs have exacerbated the risk of economic recession. In the medium to long term, the green transition of the global economy and electrification are helping to boost additional demand for the metal, which is widely used in the power and construction industries, while copper mine production has been disrupted.
The most actively traded June copper contract on the Shanghai Futures Exchange rose 1,420 yuan to close at 65,600 yuan a ton on Thursday. Bonded copper for July delivery on the Shanghai International Energy Exchange (INE) rose 1,320 yuan to close at 58,030 yuan a tonne.
On Thursday, the trading volume of COMEX copper futures was 72,254 lots, compared with 93,700 lots in the previous trading day; the number of empty positions was 207,293 lots, compared with 210,415 lots in the previous trading day.
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