COMEX June 7 Copper Roundup

New York, June 7 news: Copper futures on the Chicago Mercantile Exchange (COMEX) fell on Wednesday, ending a four-session winning streak. Weak Chinese trade data and concerns over the outlook for global economic growth weighed on copper prices.

As of the close, copper futures fell by 1.25 cents to 2.1 cents. Among them, the most actively traded July 2023 copper closed at $3.756 per pound, down 1.25 cents or 0.33% from the previous trading day. It was the biggest one-day drop since late May.

July copper traded in a range of $3.741 to $3.8115.

The U.S. dollar rose on Wednesday, weighing on dollar-quoted metals. ICE's June U.S. Dollar Basket Index closed at 104.085 points, up 0.011 points from Tuesday.

Trade data released by Chinese customs on Wednesday showed that exports (in dollar terms) fell 7.5% year-on-year in May, while imports fell 4.5%. The trade surplus was US$65.81 billion, a year-on-year decrease of 16.1%.

On Wednesday, the OECD released an economic outlook report, predicting that the global economic growth rate will drop to 2.7% in 2023, lower than 3.3% in 2022, and the economic growth rate will rebound slightly to 2.9% in 2024. The OECD said the global economy grew only modestly as the full impact of central bank rate hikes materialized. U.S. economic growth will slow to 1.6% in 2023 and slow to 1.0% in 2024. The report pointed out that the global economic recovery is still fragile, and the risks are tilted to the downside.

Data released by the U.S. Department of Commerce on Wednesday showed that the U.S. trade deficit hit the highest level in six months in April and the largest increase in eight years. If the trend continues, it could lead to a drag on economic growth in the second quarter. Economists estimate that trade could shave 2.5 percentage points off U.S. gross domestic product in the second quarter unless the momentum in import growth reverses. A stronger dollar and slowing global demand have weighed on U.S. exports.

Copper prices have given up all their gains in 2023, mainly due to weak demand in the United States and Europe, and central banks such as the Federal Reserve raising interest rates have put pressure on economic growth; Hope is fading. Copper futures fell 6.18% in May, the biggest monthly drop since June 2022 and the second consecutive monthly decline. During April and May, copper futures fell by 11.54%.

The near-term contract of COMEX copper futures fell 1.34% so far this year. The closing price on Wednesday was 15.79% lower than the same period last year, and 23.83% lower than the historical peak of $4.929 in March 2022.

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, 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 most actively traded July 2023 copper contract on the Shanghai Futures Exchange closed up 40 yuan at 66,690 yuan a tonne on Wednesday. Bonded copper futures for August 2023 on the Shanghai International Energy Exchange (INE) rose 120 yuan to 59,260 yuan a tonne.

On Wednesday, the trading volume of COMEX copper futures was 125,835 lots, compared with 74,979 lots in the previous trading day; the volume of short positions was 229,756 lots, compared with 227,276 lots in the previous trading day.