New York, September 14: Copper futures on the Chicago Mercantile Exchange (COMEX) rose for the second consecutive day on Thursday, hitting a new high in more than a week. The economic situation of China, the top metal consumer, has improved, and the central bank announced another reserve requirement ratio cut on Thursday, which has provided support to copper prices.
As of the close, copper futures rose by 2.25 cents to 2.85 cents, with the most actively traded December 2023 copper closing at $3.8215/lb, up 2.85 cents or 0.75% from the previous trading day.
December copper futures traded in a trading range of $3.778 to $3.8425.
On Thursday, the People's Bank of China announced a reduction in bank deposit reserve ratios to increase liquidity and support economic recovery. This is also the second RRR cut this year.
Recently released data suggests that economic activity in China may be stabilizing, with manufacturers reporting new order growth for the first time in five months. China's National Bureau of Statistics will release economic data for August at 10 a.m. on Friday, with traders looking for more clues on whether China's economy has improved.
Economists expect China's industrial output to grow 3.9% year-on-year in August, faster than in July.
There are increasing signs that Chinese manufacturers are going through the most difficult period. The manufacturing purchasing managers index in August was close to the boom-bust line of 50, indicating that economic activity has stopped shrinking. New factory orders expanded for the first time since March. At the same time, the decline in Chinese exports narrowed, indicating that overseas demand may be stabilizing.
COMEX copper futures are up 0.27% so far this year. Thursday's closing price was 0.60% lower than the same period last year, but still 7.35% higher than the same period last year. For comparison, COMEX copper futures fell 14.58% in 2022, reflecting concerns about the global economic growth outlook. High inflation has prompted European and American central banks to actively raise interest rates to curb inflation, while rising borrowing costs have intensified the risk of economic recession. In the medium to long term, the green transition of the global economy and the electrification of the global economy could help boost additional demand for this widely used metal in the power and construction industries, while copper mine production has been disrupted.
On Thursday, the most actively traded October copper futures on the Shanghai Futures Exchange closed up 360 yuan at 69,240 yuan per ton. Shanghai International Energy Exchange (INE) January bonded copper rose 370 yuan to close at 61,280 yuan per ton.
On Thursday, the trading volume of COMEX copper futures was 74,503 lots, compared with 59,384 lots on the previous trading day; the open volume was 197,024 lots, compared with 196,198 lots on the previous trading day.
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