February Copper Update

  • 9 Mar 2018
  • By CME Group
  • Topics: Metals

Copper Updates

  • Effective at the close of trading February 27 for the March 2018 contract month and beyond, the spot month position limits will be increased for five (5) Copper futures and option contracts from 1,200 to 1,500 futures contract equivalents
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  • Copper futures traded in choppy fashion throughout February with the May futures contract hitting a year-to-date low of 3.0530 on February 9, only to rally the following five consecutive trading days to a monthly high of 3.2685 on February 16.
  • Broader macro and FX drivers seemingly influenced copper futures price volatility as the market absorbed global manufacturing data, swings in the USD, and a series comments from the new Fed Chairman Jerome Powell.
  • Long positions in Copper futures held by money managers continued to decrease in February reaching the low of 79K lots as of February 13 before climbing back up again to 86K contracts towards the end of the month as copper price continued to consolidate around current levels. Producer short positions also bounced back from the lows to 116K as of February 27, however, remained below January highs.
  • Higher market volatility was supported by the volume increase in both Copper futures and options. Average daily volume of Copper futures in February reached 157.9K contracts (~1.8 mil mt), up by 27.8% YoY.
  • Copper options average daily volume reached approximately 1,051 contracts in February as liquidity continued to grow and electronic markets on the screen get narrower and deeper.

Copper Price Performance

Copper Futures Forward Curve

Copper Futures Month-on-Month Change in Open Interest


Liquidity Charts

February 2018 ADV per hour (based on GMT time-zone)

Source: CME. Data as of 28 February 2018


Copper Futures Market Depth

Source: CME. Data as of 28 February 2018


Copper Inventory Movements

Date Total Inventory Eligible Registered Registered, %
2/28/2017 126,239 12,517 113,722 90%
1/31/2018 222,305 10,446 211,859 95%
2/28/2018 230,376 5,938 224,438 97%
MoM Change, % 4% -43% 6%  
YoY Change, % 82% -53% 97%  

Source: CME. Data as of 28 February 2018


Disaggregated Commitment of Traders Report

Open Interest

Data as of Year Open Interest % Change in OI (WOW)
2/27/2018 264683 3.22%

Long

Data as of Year Producer / Merchant Positions Long Swap Dealers Positions Long Managed Money Positions Long Other Rept Positions Long Nonrept Positions Long Total Long
  % Change in Producer Long (WOW) % Change in Swap Long (WOW) % Change in Managed Money Long (WOW) % Change in Other Rept Long (WOW) % Change in Nonrept Long (WOW) %Change in Total Long
2/27/2018 41300 43456 104814 57866 17247 264683
  23.15% 2.97% 5.90% -6.95% -11.64% 3.22%

Short

Data as of Year Producer / Merchant Positions Short Swap Dealers Positions Short Managed Money Positions Short Other Rept Positions Short Nonrept Positions Short Total Short
  % Change in Producer Short (WOW) % Change in Swap Short (WOW) % Change in Managed Money Short (WOW) % Change in Other Rept Short (WOW) % Change in Nonrept Short (WOW) %Change in Total Short
2/27/2018 116401 15376 63179 58100 11627 264683
  2.81% -10.65% 21.88% -6.33% -4.15% 3.43%

Total

Data as of Year Producer Total Swap Dealers Total Managed Money Total Other Rept Total Nonrept Total
  %Change in Producer Total %Change in Swap Dealers Total %Change in Managed Money Total %Change in Other Rept Total %Change in Nonrept Total
2/27/2018 157701 58832 167993 115966 28874
  7.46% -0.97% 11.39% -6.64% -8.77%

Source: CFTC. Data as of 27 February 2018

Source: CFTC. Data as of 27 February 2018

Source: CFTC. Data as of 27 February 2018


Copper Premium Futures

  • Newly launched Copper Premium futures traded 120 lots in February as open interest reached 374 contracts out to September 2018. The market was quiet due to the Chinese New Year holiday (February 15-21).
  • There are good bids on the screen until the end of 2018.

Source: CME Direct. Screenshot as of 2 March 2018


Copper Options

Put/Call Options Open Interest Breakdown and Top Strikes

Top 5 Open Interest for HIGH GRADE COPPER OPTION for 28/02/2018
Product Long Desc Contract Month Strike OI
HIGH GRADE COPPER OPTION 201804 3.3000 1,482
HIGH GRADE COPPER OPTION 201812 3.1500 700
HIGH GRADE COPPER OPTION 201804 3.1000 516
HIGH GRADE COPPER OPTION 201804 3.0500 511

Source: CME. Data as of 28 February 2018.

Copper Options: Bid/Ask Spreads Heatmap

Source: CME. Data as of 28 February 2018.

Copper Options: Depth Heatmap

Source: CME. Data as of 28 February 2018.

*Percentiles represent portion of time when the order book is available


If you have any questions or would like more information regarding this weekly communication, please contact metals@cmegroup.com.

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