New York, July 11 news: Copper futures on the Chicago Mercantile Exchange (COMEX) fell on Tuesday, ending a two-day winning streak, mainly because of concerns that the central bank's interest rate hikes will drag down economic growth and the outlook for metal demand.
As of the close, copper futures fell by 1.5 cents to 1.85 cents, and the most actively traded September 2023 copper futures fell 1.85 cents or 0.49% to close at $3.766 per pound,
September copper traded in a range of $3.752 to $3.8225.
Traders are pricing in a 92.4% chance of a 25 basis point rate hike at the Fed's July 26 meeting, according to the FedWatch tool. Fed officials said this week that the central bank expects to raise interest rates by at least 50 basis points this year in response to persistent price pressures, but traders only expect further tightening by about 35 basis points. John Williams, president of the New York branch of the Federal Reserve Bank, said in an interview on Tuesday that the central bank has not yet completed the work of raising short-term interest rate targets.
The near-term contract of COMEX copper futures rose 0.33% so far this month, and the closing price on Tuesday was 13.86% higher than the same period last year, mainly reflecting the market's expectation that China will introduce more stimulus measures to support economic growth.
So far this year, copper futures are still down 1.37%, continuing the trend of copper futures falling 14.6% in 2022, mainly because the outlook for global economic growth is worrying. In contrast, copper has recorded two consecutive years of gains of 25% in 2020 and 2021, as the green transition 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 mines face challenges. Disruptions such as underinvestment and production disruptions.
The August 2023 copper contract on the Shanghai Futures Exchange rose 270 yuan to 68,070 yuan a tonne on Tuesday. Bonded copper futures for October delivery on the Shanghai International Energy Exchange (INE) rose 320 yuan to 60,350 yuan a tonne.
On Tuesday, the trading volume of COMEX copper futures was 77,441 lots, compared with 57,141 lots in the previous trading day; the number of open positions was 195,146 lots, compared with 194,781 lots in the previous trading day.
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