New York, April 25th: Copper futures on the Chicago Mercantile Exchange (COMEX) fell sharply on Tuesday, mainly due to worries about the U.S. economic outlook, weak demand in China and a stronger dollar, reflecting investors' uncertainties in the global economy. Under the background of choosing risk avoidance.
As of the close, copper futures fell by 9.9 cents to 10.7 cents, and the most actively traded May 2023 copper futures fell 10.6 cents, or 2.68%, to close at $3.848 per pound.
May copper traded in a range of $3.83 to $3.97.
The U.S. dollar strengthened on Tuesday. ICE's U.S. dollar index was at 101.56 points, up 0.48% from Monday. A stronger dollar means dollar-priced copper is more expensive for buyers holding other currencies.
The near-term COMEX copper contract has fallen 6.30% so far this month and is still up 1.06% so far this year, mainly because the market expected economic growth in top metals consumer China and a recovery in metal demand earlier this year.
The closing price of the near-term contract of COMEX copper on Tuesday was 13.38% lower than the same period last year, and 21.97% lower than the historical peak of $4.929 in March 2022. In 2022, COMEX copper futures fell 14.58%, because the outlook for global economic growth is worrying, high inflation prompts European and American central banks to actively raise interest rates to curb inflation, and the increase in borrowing costs exacerbates the risk of economic recession. In contrast, copper has recorded two consecutive years of gains of 25% in 2020 and 2021, as the green transformation 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 mine production is increasing. Faced with underinvestment and disrupted by industrial action factors such as the epidemic and strikes.
The June 2023 copper contract on the Shanghai Futures Exchange closed down 320 yuan at 68,170 yuan a tonne on Tuesday. Bonded copper futures for June delivery on the Shanghai International Energy Exchange (INE) fell 400 yuan to 60,390 yuan a tonne.
On Tuesday, the trading volume of COMEX copper futures was 174,458 lots, compared with 109,617 lots in the previous trading day; the volume of short positions was 203,343 lots, compared with 200,254 lots in the previous trading day.
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