March Copper Update

  • 6 Apr 2018
  • By CME Group
  • Topics: Metals

Copper Updates

  • Copper was under pressure again in March, retreating for a third month in a row, despite relatively decent Chinese macro and import numbers, as ongoing trade tensions dominated investor focus. The market mostly ignored the fact that labor negotiations are being settled swiftly and ahead of schedule, although some important negotiations (Escondida and Grasberg) are still unresolved.
  • Net-long positions in Copper futures held by money managers fell to 3,724 contracts as of March 27, weekly CFTC data on futures and options showed. The net-long position was the least bullish in 17 months and has declined for the previous five consecutive weeks. Short-only positions were the highest in 17 months, while long-only positions fell to the lowest level since approximately that same time.
  • Copper futures traded on average 120K contracts in March, up by 51 % YoY. Average daily volume in Q1 2018 reached 136K lots, up by 43% YoY and highest in the contract's history.
  • Copper options average daily volume remained robust in March at 848 lots, up 374% YoY. Average daily volume in Q1 2018 reached 948 lots, the highest quarterly volume in the contract's history.
  • Volume in Copper Financial futures (HGS) totaled 3,847 contracts, the third highest monthly total in the contract's history. Average daily volume in Q1 2018 reached 154 lots compared to 10 lots in Q1 2017. Open interest now extends out to January 2020.
    Learn more about HGS..
  • Copper inventory reached 234,276 short tons on March 27, the highest level in 14 years. Inventory held in COMEX approved warehouses increased by 62% YoY as of end of March.

Copper Price Performance

Copper Futures Forward Curve

Copper Futures Month-on-Month Change in Open Interest


Liquidity Charts

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

Source: CME. Data as of 29 March 2018


Copper Futures Market Depth

Source: CME. Data as of 29 March 2018


Copper Inventory Movements

Date Total Inventory Eligible Registered Registered, %
3/31/2017 144,120 7,362 136,758 95%
2/28/2018 230,731 5,880 224,851 97%
3/29/2018 232,817 12,536 220,281 95%
MoM Change, % 1% 113% -2%  
YoY Change, % 62% 70% 61%  

Source: CME. Data as of 29 March 2018


Disaggregated Commitment of Traders Report

Open Interest

Data as of Year Open Interest % Change in OI (WOW)
3/27/2018 293335 3.48%

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
3/27/2018 63386 52203 90001 66121 21624 293335
  17.10% 12.16% -4.10% 0.02% -5.28% 3.48%

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
3/27/2018 120625 21257 87026 49909 14518 293335
  -2.64% 22.25% 15.77% -7.44% 10.97% 2.96%

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
3/27/2018 184011 73460 177027 116030 36142
  3.36% 14.91% 4.74% -3.33% 0.64%

Source: CFTC. Data as of 27 March 2018

Source: CFTC. Data as of 27 March 2018

Source: CFTC. Data as of 27 March 2018


Copper Premium Futures

  • Momentum in newly launched copper premium futures has slowed down due to the lack of volatility in the underlying and seasonal slowdown of the industry following Chinese New Year.
  • There is good volume on the on-screen bids till the end of 2018.

Source: CME Direct. Screenshot as of 3 April 2018


Copper Options

Put/Call Options Open Interest Breakdown and Top Strikes

Top 5 Open Interest for HIGH GRADE COPPER OPTION for 29 March 2018
Product Contract
Month
Strike,
$/lb
Open
Interest
HIGH GRADE COPPER OPTION 201805 3.1000 2,116
HIGH GRADE COPPER OPTION 201805 3.1500 1,665
HIGH GRADE COPPER OPTION 201805 3.2500 999
HIGH GRADE COPPER OPTION 201805 3.2000 888
HIGH GRADE COPPER OPTION 201805 3.0000 870

Source: CME. Data as of 29 March 2018.

Copper Options: Bid/Ask Spreads Heatmap

Source: CME. Data as of 29 March 2018.

Copper Options: Depth Heatmap

Source: CME. Data as of 29 March 2018.

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


Copper Financial Futures


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

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