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Copper Prices Edge into Positive Territory Amid Upbeat Economic News and Easing Geopolitical Tensions

Strategic Insights

— 2 min read

Copper futures on the Comex division of the New York Mercantile Exchange edged into positive territory on Wednesday, supported by upbeat economic news, recent price declines, and easing geopolitical tensions in the Korean peninsula. The most actively traded contract for December delivery rose 1.1%, or 4.05 cents, to $3.7430 per pound. This increase followed a weaker previous session, where the contract had lost 3.4% from Friday's settlement. The positive momentum in copper prices was also fueled by better-than-expected U.S. unemployment data, which showed a decline of 34,000 in jobless claims to 407,000 in the week of November 20.

Key Takeaways:

  • Copper futures on the Comex division of the New York Mercantile Exchange rose 1.1%, or 4.05 cents, to $3.7430 per pound on Wednesday, driven by upbeat economic news and easing geopolitical tensions.
  • The most recent economic data, including a decline of 34,000 in jobless claims to 407,000 in the week of November 20, supported the positive momentum in copper prices.
  • Copper is particularly sensitive to economic improvement as the metal is widely used in manufacturing and construction, making it a key indicator of economic health.
  • Matt Zeman, head of trading at LaSalle Futures, said that the market is encouraged by the better-than-expected economic data, which has led to bargain hunters entering the market to purchase copper at low prices.
  • The easing of geopolitical tensions in the Korean peninsula, which had led to a decline in copper prices the previous day, also contributed to the positive momentum in copper futures.
  • International Copper Study Group data showed a refined copper consumption deficit of 363,000 tons between January and August this year,-supporting the upward trend in copper prices.
  • Inventory levels at London Metal Exchange approved warehouses fell 982 metric tons to 357,125 metric tons on Wednesday, indicating a strong demand for copper.

Statistics:

  • Copper futures rose 1.1%, or 4.05 cents, to $3.7430 per pound on the Comex division of the New York Mercantile Exchange on Wednesday.
  • Jobless claims declined by 34,000 to 407,000 in the week of November 20, the lowest number since July 2008.
  • Copper prices are influenced by economic improvement, with the metal being widely used in manufacturing and construction.
  • The refined copper consumption deficit between January and August this year was 363,000 tons, compared to a smaller deficit of 47,000 tons in the same period last year.
  • Inventory levels at London Metal Exchange approved warehouses fell 982 metric tons to 357,125 metric tons on Wednesday.

Sources:

  • Dow Jones Commodities News via Comtex, "Comex copper futures edge into positive territory"
  • Edward Meir, senior commodity metals analyst at MF Global, "It is too early write off Tuesday's Korean skirmish given how wholly unpredictable the North Koreans can be"
  • International Copper Study Group, "Refined copper consumption deficit of 363,000 tons between January and August this year"
  • Victoria Ruan and Tatyana Shumsky, Dow Jones Newswires, "Copper futures edge into positive territory as upbeat economic news and easing geopolitical tensions support the market"

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