New York, April 20 news: Copper futures on the Chicago Mercantile Exchange (COMEX) fell for a second straight day on Thursday on concerns over economic growth and slowing demand for the metal due to further interest rate hikes by the Federal Reserve.
As of the close, copper futures fell by 4.55 cents to 5.15 cents. Among them, the most actively traded May 2023 copper closed at $4.0255 per pound, down 5.15 cents or 1.26% from the previous trading day.
May copper traded in a range of $4.019 to $4.0805.
Copper has fallen four times in the past five sessions. Copper prices closed at their lowest level since April 10 on Thursday, largely reflecting concerns about the prospect of a U.S. recession.
A slew of economic data on Thursday was weak. The number of Americans filing new claims for jobless benefits rose modestly last week, pointing to a gradual slowdown in the labor market. The U.S. housing market is also deep in recession. The National Association of Realtors reported that U.S. existing home sales fell 2.4% to a seasonally adjusted annual rate of 4.44 million units in March.
U.S. manufacturing is also feeling the pinch from rising borrowing costs as the Federal Reserve raises interest rates. A gauge of factory activity in the Mid-Atlantic region unexpectedly contracted in April, falling to its weakest level in nearly three years, according to a report from the Philadelphia Fed.
Economists generally expect the Fed to raise interest rates by 25 basis points in May, ending a cycle of rate hikes that began in March last year, before keeping rates on hold for the rest of the year, a survey showed.
Maximo Pacheco, chairman of the world's largest copper miner, Chile's state-owned copper company (Codelco), said on Thursday that the company's goal is to increase annual copper production by at least 17% by the end of this decade, because copper The demand is extremely strong.
Data released this week by the International Copper Association (ICA) show that global copper supply will grow by 26% to 38.5 million tons per year between now and 2035, but even taking into account recycled copper, this Supply is still 1.7% below expected demand. Goldman Sachs analysts say strong demand will push copper prices to $15,000 a tonne by 2025, 67 percent above current prices.
Copper prices (near-term contracts) have fallen 2.01% so far this month and are up 5.69% so far this year, mainly due to market expectations of an improving outlook for China's economic growth and metal demand. Thursday's closing price was still 14.49% lower than a year earlier and 18.40% lower than its all-time peak of $4.929 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 higher 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.
Looking at the external market, the most actively traded May copper futures on the Shanghai Futures Exchange fell 250 yuan to close at 69,480 yuan per ton on Thursday. Bonded copper for June delivery on the Shanghai International Energy Exchange (INE) fell 260 yuan to close at 61,600 yuan a tonne.
On Thursday, the trading volume of COMEX copper futures was 91,142 lots, compared with 89,555 lots in the previous trading day; the number of empty positions was 202,999 lots, compared with 206,216 lots in the previous trading day.
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