COMEX July 26 Copper Roundup

New York, July 26: Copper futures on the Chicago Mercantile Exchange (COMEX) fell on Wednesday, failing to extend the rally of the past two days, as the Federal Reserve raised interest rates by 25 basis points and the top metals consumer lacked specific policies. stimulus.

As of the close, copper futures fell by 1.3 cents to 1.5 cents, of which the most actively traded September 2023 copper fell 1.35 cents, or 0.34%, to close at $3.902 per pound.

September copper traded in a range of $3.8765 to $3.9265.

The Federal Reserve announced a 25-basis-point rate hike on Wednesday, raising its benchmark interest rate to a range of 5.25% to 5.50%, the highest rate in 22 years. Rising interest rates mean higher borrowing costs, which can lead to slower economic growth and weaken demand for commodities. Wednesday was also the 11th rate hike in the Fed's 12 policy meetings. Fed Chairman Jerome Powell's policy statement on Wednesday hinted that another rate hike remains possible in the future.

Copper futures on COMEX rose 2.20% so far this week, mainly because China's top policymakers promised to optimize real estate policies, expand domestic demand and accelerate the issuance of local special bonds. But traders are looking forward to more details of China's follow-up policy to weigh how much the stimulus policy will boost metals demand.

The near-term contract of COMEX copper futures has risen 4.00% so far this month and 2.23% so far this year. The closing price on Wednesday rose 13.44% compared with the same period last year. Introduce more stimulus measures to support further economic recovery.

The current copper price is 21.07% lower than the historical peak of $4.929 in March 2022, reflecting the continued interest rate hikes by major central banks in the United States and Europe, which has put pressure on economic growth and commodity demand; while the Chinese economy has performed worse than earlier expected.

Copper futures on COMEX fell by 14.6% in 2022, mainly because the outlook for global economic growth is worrisome. High inflation prompted European and American central banks to actively raise interest rates to curb inflation, exacerbating the risk of economic recession. In contrast, 2020 and 2021 copper has recorded two consecutive years of gains of 25%, the global economic green transition and electrification will help boost the additional demand for this widely used metal in the power and construction industries, while copper mines face Disruptions such as underinvestment and production disruptions.

The most actively traded September 2023 copper contract on the Shanghai Futures Exchange closed up 450 yuan at 69,180 yuan a tonne on Wednesday. Bonded copper futures for October 2023 on the Shanghai International Energy Exchange (INE) rose 380 yuan to 61,580 yuan a tonne.

On Wednesday, the trading volume of COMEX copper futures was 76,423 lots, compared with 102,755 lots in the previous trading day; the volume of short positions was 234,713 lots, compared with 229,944 lots in the previous trading day.