Now that the Shanghai Futures Exchange controls a good portion of wholesale trading in copper, it is both good and interesting to see that volumes have risen steadily over the past two years. It is testament to the increasing global importance of this market and reinforces the bearish trend that has dominated since 2011’s high of 75,400 yuan (HK$89,638) per tonne. Open interest has also risen steadily and is now more than double what it was just five years ago, again emphasising its use by professional producers and buyers for hedging purposes. Historical volatility remains relatively muted, suggesting the drift will continue down towards the psychological 25,000-yuan level and potentially the 2009 low at 23,650 yuan, where serious basing activity should start – slowly.
