New York, June 1 news: Copper futures on the Chicago Mercantile Exchange (COMEX) closed higher on Thursday, ending the decline in the previous two trading sessions and rebounding from a near six-month low.
As of the close, copper futures rose by 6.8 cents to 7.55 cents, of which the most actively traded July 2023 copper closed at US$3.711/lb, up 7.4 cents or 2.02% from the previous trading day, a record high Highest closing price since May 19.
July copper traded in a range of $3.645 to $3.7315.
A private sector survey out of China on Thursday showed that Chinese factory activity unexpectedly swung from a decline to growth in May, buoyed by improvements in production and demand, helping to improve market sentiment.
The U.S. dollar weakened on Thursday as markets now priced in a strong likelihood that the Federal Reserve will not raise interest rates this month. A weaker dollar makes dollar-denominated metals cheaper for holders of other currencies.
The drop in copper production in Chile also supported copper prices. Copper production fell more than 5% month-on-month and 1% year-on-year in April, according to data released by Chile's National Institute of Statistics on Wednesday. Although the year-on-year decline does not seem significant, last year's production base was already low as production in 2022 has already declined.
Maximo Pachek, chairman of Chile's state-owned copper company Codelco, said on Wednesday that despite some volatility in the copper market, copper prices should remain "firm" going forward because of strong demand for the metal.
The near-term contract of COMEX copper futures has fallen 2.60% so far this year. Copper prices have erased all the gains made earlier in the year as China's economic growth slows and Western economies still face recession fears.
The closing price on Thursday was 18.61% lower than the same period last year, and 24.80% lower than the historical peak reached in March 2022. 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 rising 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-active July copper contract on the Shanghai Futures Exchange rose 910 yuan to close at 65,270 yuan a tonne on Thursday. Bonded copper for August delivery on the Shanghai International Energy Exchange (INE) rose 920 yuan to close at 57,720 yuan a tonne.
On Thursday, the trading volume of COMEX copper futures was 102,236 lots, compared with 75,971 lots in the previous trading day; the number of open positions was 225,332 lots, compared with 223,185 lots in the previous trading day.
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