COMEX Copper futures (HG) at CME Group are one of the most widely traded futures contracts for this ubiquitous base metal.
After steel and aluminum, copper is the third-most used metal. Prevalent in construction, circuitry, consumer and industrial products, the production and use of copper has been steadily growing for nearly 10,000 years
As a relatively low-cost, malleable, optimal conductor of heat and electricity, copper is seen as an important indicator of the health of the global manufacturing sector and the world economy.
About the Contract
Each COMEX Copper futures contract represents 25,000 pounds of deliverable copper, with a minimum tick price of $12.50 per contract. The contract trades electronically nearly around the clock, six days a week. Traders are able to leverage substantial margin efficiencies when exposed to this liquid market.
Supply and Demand Factors
The production of copper is widely distributed. The top producers fluctuate from year-to-year as mines become exhausted and new ones are discovered.
The supply of copper, though still plentiful, is closely monitored by investors and end-users.
On the demand side, construction accounts for nearly half of the metal’s demand. Electronic and consumer products constitute an additional 30% of copper use.
Therefore, investors in outside asset classes, such as equities, tend to monitor copper’s price.
In short, copper is instrumental both in the functioning of the global economy and as an indicator for the health of the economy, which makes the Copper futures contracts a powerful tool in an investor’s portfolio.
