CME copper volumes soar in December

CME Group copper futures surged at the end of last year, with monthly average daily volumes rising 72.3% year on year to 117,658 contracts, the US-based exchange said.

The red metal was one of the biggest winners of 2017 due to a scorching Chinese property market, extended outages at some of the world’s largest copper mines and upbeat global growth prospects.

The combined factors pushed prices to around a four-year high and is keeping prices supported in early 2018. At last glance, the most-actively traded Comex copper contract was at $3.232 per lb, or $7,134 per tonne on the London Metal Exchange.

Average daily copper volumes for the entire year stood at 107,775 contracts, up 26.2%, but pales in comparison to the 180.5% annual growth in copper options. Copper options jumped even more sharply in December, surging by 1,053.1% year on year to an average daily volume of 1,006 contracts.

Metals volumes overall averaged 531,000 contracts per day in December, up 48% from the same month a year earlier. For 2017, metals volumes rose by 23% to a record 568,000 contracts.

But the surge in activity has not translated into an uptick in the US copper premium, which saw little volatility last year and is not projected to alter much throughout this year.

Metal Bulletin sister title American Metal Market’s assessment of the US copper cathode premium stood at 5.25-5.75 cents per lb delivered to the US Midwest on Tuesday January 9, where it has remained since November 21.

Spot market demand was quiet during the typically slow year-end period, with the majority of market participants taking extended absences following the completion of annual contracts for the year.

But that did not prevent financial trading and the broader investment community from becoming bullish on the red metal, and that optimism is expected to remain in 2018.