New York, July 13 news: Copper futures on the Chicago Mercantile Exchange (COMEX) closed up more than 2% for the second day in a row on Thursday, with the benchmark contract advancing towards the $4 mark.
As of the close, copper futures rose by 8.05 cents to 8.8 cents. Among them, the most actively traded September 2023 copper closed at US$3.94/lb, an increase of 8.7 cents or 2.26% from the previous trading day.
September copper traded in a range of $3.842 to $3.951.
Data released this week in the United States showed that inflation has slowed further and was lower than expected, raising expectations that after the Federal Reserve raised interest rates at the end of this month, it will end this week's monetary tightening cycle that began in March last year. Over the past year or so, the Federal Reserve has raised interest rates aggressively and higher borrowing costs have slowed economic growth and hurt demand for commodities including copper. The expectation that the Fed's interest rate hike cycle is coming to an end has helped to increase risk appetite and led to a continued decline in the dollar exchange rate.
On Thursday, ICE's U.S. dollar index closed at 99.456, down 0.73% from the previous trading day, hitting the lowest point in 15 months. The U.S. dollar index is down 2.45% for the week and 3.05% so far this year. A weaker dollar means copper quoted in U.S. dollars is more attractive to non-dollar buyers, supporting demand and prices.
The near-term contract of COMEX copper futures has risen 5.04% so far this month and 3.26% so far this year. The closing price on Thursday was 22.40% higher than the same period last year. In contrast, COMEX copper futures fell by 14.58% in 2022, reflecting the worrying outlook for global economic growth. High inflation has prompted central banks in Europe and the United States to actively raise interest rates to curb inflation, while higher borrowing costs have exacerbated the risk of economic recession. In the medium to long term, the green transition of the global economy and electrification are helping to boost additional demand for the metal, which is widely used in the power and construction industries, while copper mine production has been disrupted.
The most actively traded August copper contract on the Shanghai Futures Exchange rose 880 yuan to close at 68,450 yuan a tonne on Thursday. Bonded copper for October delivery on the Shanghai International Energy Exchange (INE) rose 850 yuan to close at 60,760 yuan a tonne.
On Thursday, the trading volume of COMEX copper futures was 125,579 lots, compared with 93,229 lots in the previous trading day; the volume of short positions was 199,532 lots, compared with 197,985 lots in the previous trading day.
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