COMEX May 16 Copper Roundup

New York, May 16 news: Copper futures on the Chicago Mercantile Exchange (COMEX) fell on Tuesday, mainly because economic data from top metal importer China was weaker than expected, raising concerns about metals demand.

As of the close, copper futures fell by 7.95 cents to 8.4 cents, and the most actively traded July 2023 copper futures fell 8.4 cents, or 2.24%, to close at $3.667 per pound.

July copper traded in a range of $3.657 to $3.7545.

Data released by the National Bureau of Statistics of China on Tuesday showed that the growth rate of China's industrial activities in April was lower than expected. Although it increased by 5.6% year-on-year, it was far below the median forecast of economists of 10.9%. Growth in fixed-asset investment slowed to 4.7 percent in the first four months of the year, also below expectations. Data on Tuesday also showed that the housing market remained weak. While real estate sales rose 13.2% in April from a year earlier, investment in the real estate sector contracted by 16.2%. Housing starts continued to decline.

Analysts said that as data showed that the economic recovery was lacking momentum, it may prompt policymakers to introduce more stimulus policies. China's central bank injected more long-term liquidity into the financial system on Monday.

The dollar rose for a second straight session on Tuesday as traders awaited clarity on the outcome of talks on the U.S. debt ceiling. A stronger dollar makes dollar-denominated metals more expensive for holders of other currencies, which could dampen demand.

President Joe Biden took a more optimistic view of the prospects for negotiations on Monday, but House Speaker Kevin McCarthy said significant hurdles remained. Biden has always insisted that raising the debt ceiling is non-negotiable, but McCarthy has advocated linking the debt ceiling to spending cuts.

The recent COMEX copper futures contract has fallen 5.57% so far this month and 3.97% so far this year, but the closing price is still 13.80% lower than the same period last year and 25.86% lower than the historical peak reached in March 2022. COMEX copper futures fell by 14.6% in 2022, mainly because the outlook for global economic growth is worrying. High inflation prompted European and American central banks to actively raise interest rates to curb inflation, exacerbating the risk of economic recession. In contrast, copper has recorded two consecutive years of gains of 25% in 2020 and 2021, as the green transition of the global economy and electrification help boost additional demand for the metal, which is widely used in the power and construction industries, while copper mines face challenges. Disruptions such as underinvestment and production disruptions.

The June 2023 copper contract on the Shanghai Futures Exchange closed down 490 yuan at 64,640 yuan a tonne on Tuesday. July bonded copper futures on the Shanghai International Energy Exchange (INE) fell 390 yuan to 57,350 yuan a tonne.

On Tuesday, the trading volume of COMEX copper futures was 85,119 lots, compared with 67,968 lots in the previous trading day; the number of open positions was 208,212 lots, compared with 211,704 lots in the previous trading day.