COMEX Copper Roundup for October 24

New York, October 24: Copper futures on the Chicago Mercantile Exchange (COMEX) rose on Tuesday, hitting a nearly two-week high, mainly because China, the top metal consumer, introduced more economic stimulus measures to help Offsetting pressure from a strong dollar.

As of the close, copper futures rose from 3.3 cents to 3.8 cents. Among them, the most actively traded December 2023 copper futures rose 3.75 cents or 1.05% to close at $3.624/lb, setting a new high since October 11. Highest closing price.

December copper futures traded in a trading range of $3.5625 to $3.6395.

China's National People's Congress approved a plan on Tuesday to allow local governments to advance part of their 2024 bond quotas and issue new sovereign debt to support economic recovery.

Chinese copper demand has shown resilience, with domestic production hitting a record high despite falling prices. Data from the National Bureau of Statistics showed that copper smelting capacity increased in September, pushing output to 1.14 million tons, a record high for the second consecutive month. Meanwhile, inventories held by smelters have fallen to their lowest levels since November.

The U.S. dollar's exchange rate index rose 0.7% against other major currencies on Tuesday as data showed that U.S. economic data was good, especially relative to the euro zone, which helped stimulate a stronger dollar.

A strong dollar means U.S. dollar-priced commodities are more expensive for buyers holding other currencies.

Traders will focus on Wednesday's speech by Federal Reserve Chairman Jerome Powell, hoping to find more clues about the Fed's interest rate policy. Traders see a 25% chance of a rate hike by the Fed in December, and expect the Fed to keep interest rates above 5% until July next year, according to the FedWatch tool.

The recent COMEX copper futures contract has fallen 3.11% so far this month and 5.14% so far this year. The closing price on Tuesday was 4.62% higher than the same period last year, but it was still 26.76% lower than the historical peak hit on March 4, 2022.

Copper fell 14.6% in 2022 as global economic growth prospects are 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 Tuesday, the Shanghai Futures Exchange's December 2023 copper contract closed up 570 yuan at 66,200 yuan per ton. Bonded copper futures for December on the Shanghai International Energy Trading Center (INE) rose 530 yuan to 58,730 yuan per ton.

On Tuesday, the trading volume of COMEX copper futures was 103,860 lots, compared with 97,729 lots on the previous trading day; the short volume was 225,410 lots, compared with 225,449 lots on the previous trading day.