New York, November 1 News: On Wednesday, copper futures on the Chicago Mercantile Exchange (COMEX) rose steadily. But a stronger dollar caused copper to retreat from session highs.
As of the close, copper futures ranged from flat to up 0.8 cents, with the most actively traded December 2023 copper futures remaining flat at $3.649/lb.
December copper futures traded in a trading range of $3.6335 to $3.689.
Copper fell briefly in early trading on Wednesday as China's manufacturing activity data failed to meet market expectations, further weakening the demand outlook for copper.
The Caixin/S&P Global Manufacturing Purchasing Managers Index (PMI) for October released on Wednesday was 49.5 points, lower than 50.6 points in September and lower than analysts’ forecast of 50.8. This follows official PMI data released by the National Bureau of Statistics on Tuesday showing that China's manufacturing activity in October was lower than expected.
The decline in copper inventories on exchanges may provide some support to copper prices.
The dollar rose on Wednesday. The Federal Reserve announced that it would keep interest rates unchanged, but hinted that further interest rate increases are still possible in the future.
The recent COMEX copper futures contract has fallen 4.22% so far this year. The closing price on Wednesday was 3.98% higher than the same period last year and 26.05% lower than the historical peak of US$4.929 hit in March 2022, due to the aggressive interest rate hikes in major Western economies. The high interest rate environment has suppressed economic growth and commodity demand, and China's economic performance has been weaker than earlier expectations.
COMEX copper futures fell 14.6% in 2022, mainly because the global economic growth outlook is worrying. High inflation has prompted European and American central banks to actively raise interest rates to curb inflation, exacerbating the risk of economic recession. By comparison, copper in 2020 and 2021 has recorded gains of 25% for two consecutive years. The green transformation of the global economy and electrification have helped boost additional demand for this metal widely used in the power and construction industries, while copper mines are facing Disruptions such as underinvestment and production disruptions.
On Wednesday, the Shanghai Futures Exchange's December 2023 copper contract closed down 150 yuan at 67,260 yuan per ton. Bonded copper futures for January on the Shanghai International Energy Trading Center (INE) fell 110 yuan to 59,730 yuan per ton.
On Wednesday, the trading volume of COMEX copper futures was 100,746 lots, compared with 85,738 lots on the previous trading day; the short volume was 222,566 lots, compared with 223,278 lots on the previous trading day.
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