New York, May 3 news: Copper futures on the Chicago Mercantile Exchange (COMEX) fell for a second day on Wednesday, falling to their lowest price in four months, reflecting concerns about the outlook for the U.S. economy and demand for commodities.
As of the close, copper futures fell by 1.65 cents to 1.8 cents. Among them, the most actively traded July 2023 copper closed at $3.845 per pound, down 1.75 cents or 0.45% from the previous trading day, a record 1 The lowest closing price since March 5.
July copper traded in a range of $3.83 to $3.872.
In the past two trading days, copper futures have fallen by about 2.2%.
Analysts said the central bank's interest rate hikes raised concerns about the outlook for the global economy, while a regional U.S. banking crisis also fueled nervousness. The short-term technical picture of the copper market is bearish, with demand concerns triggering selling into the market; at the same time, the possibility of long-term supply shortages will help limit the room for further declines in copper prices.
The Federal Reserve announced on Wednesday that it would raise interest rates by 25 basis points, while signaling that it may pause the 14-month monetary tightening cycle. Since March last year, the Fed has raised interest rates 10 times in a row.
Fears that monetary tightening will undermine demand for commodities weighed on commodities, analysts said. On Wednesday, crude oil plunged 4%, hitting a five-week low.
So far this year, COMEX copper (near-term contract) has only increased by 0.68%. Copper is widely used in the metal in power, construction and transportation, and demand for the metal had been expected to pick up as Chinese manufacturing activity revived. But so far, China's spot copper demand has not seen the strong rebound expected by the market.
Wednesday's closing price was 11.48% lower than the same period last year, and 22.27% lower than the historical peak in March 2022.
Copper futures on COMEX fell by 14.58% in 2022, as the outlook for global economic growth is worrying, and high inflation has prompted central banks in Europe and the United States to actively raise interest rates to curb inflation, which has 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 is at risk of disruption.
From Monday to Wednesday this week, the Shanghai Futures Exchange is closed to celebrate public holidays. Trading resumed on Thursday.
On Wednesday, the trading volume of COMEX copper futures was 59,480 lots, compared with 67,217 lots in the previous trading day; the volume of short positions was 195,462 lots, compared with 194,111 lots in the previous trading day.
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