COMEX May 9 Copper Roundup

New York, May 9: Copper futures on the Chicago Mercantile Exchange (COMEX) fell on Tuesday as weak trade data from top metal importer China raised concerns about metals demand. A stronger dollar also weighed.

As of the close, copper futures fell by 2.5 cents to 2.9 cents, and the most actively traded July 2023 copper futures fell 2.8 cents, or 0.71%, to close at $3.9015 per pound.

July copper traded in a range of $3.881 to $3.924.

China's economic data was weaker than expected, putting pressure on copper futures.

Data released by China Customs on Tuesday showed that China imported 407,000 tons of unwrought copper and its products in April, a year-on-year decrease of 12.5%. Imports in the first four months of this year were 1.7 million tons, down 12.6% year-on-year. Reasons for the slowdown in imports include sluggish global demand, continued weakness in the domestic real estate sector, which has led to a slow recovery in copper demand, and higher domestic production, which has further weakened import demand.

Although China's GDP growth exceeded expectations in the first quarter, the recovery across industries was uneven. The profits of Chinese industrial companies fell by double digits in the first quarter, and China's manufacturing activity also unexpectedly shrank in April.

Many producers of copper products have cut output as orders fall and profits fall.

The dollar rose for a second straight session on Tuesday as traders awaited clarity on the outcome of talks on the U.S. debt ceiling. A stronger dollar makes dollar-denominated metals more expensive for holders of other currencies, which could dampen demand.

The U.S. will release consumer price data on Wednesday, which could influence the Federal Reserve's next interest rate policy.

The near-term contract of COMEX copper futures has risen 0.49% so far this month and 2.19% so far this year, but the closing price is still 6.39% lower than the same period last year and 21.10% lower than the historical peak reached in March 2022.

Copper futures on COMEX fell by 14.58% in 2022, because the outlook for global economic growth is worrying, high inflation prompts European and American central banks to actively raise interest rates to curb inflation, and increased borrowing costs exacerbate the risk of economic recession. In contrast, copper has recorded two consecutive years of gains of 25% in 2020 and 2021, as the green transformation 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 mine production is increasing. Faced with underinvestment and disrupted by industrial action factors such as the epidemic and strikes.

The June 2023 copper contract on the Shanghai Futures Exchange closed up 40 yuan at 67,400 yuan a tonne on Tuesday. July bonded copper futures on the Shanghai International Energy Exchange (INE) rose 70 yuan to 59,770 yuan a tonne.

On Tuesday, the trading volume of COMEX copper futures was 61,233 lots, compared with 48,339 lots in the previous trading day; the empty position was 195,096 lots, compared with 195,770 lots in the previous trading day.