SUBMISSION COVER SHEET

IMPORTANT: Check box if Confidential Treatment is requested 

Registered Entity Identifier Code (optional): 23-114

Organization: Commodity Exchange, Inc. (“COMEX”)

Filing as a: DCM SEF DCO SDR 

Please note - only ONE choice allowed.

Filing Date (mm/dd/yy): 02/27/23 Filing Description: Decrease of Spot Month Position 

Limits of Seven (7) Copper Futures and Option Contracts

SPECIFY FILING TYPE 

Please note only ONE choice allowed per Submission.

Organization Rules and Rule Amendments

Certification § 40.6(a)

Approval § 40.5(a)

Notification § 40.6(d)

Advance Notice of SIDCO Rule Change § 40.10(a)

SIDCO Emergency Rule Change § 40.10(h)

Rule Numbers: 

New Product Please note only ONE product per Submission.

Certification § 40.2(a) 

Certification Security Futures § 41.23(a)

Certification Swap Class § 40.2(d)

Approval § 40.3(a)

Approval Security Futures § 41.23(b)

Novel Derivative Product Notification § 40.12(a)

Swap Submission § 39.5

Product Terms and Conditions (product related Rules and Rule Amendments)

Certification § 40.6(a) 

Certification Made Available to Trade Determination § 40.6(a)

Certification Security Futures § 41.24(a)

Delisting (No Open Interest) § 40.6(a) 

Approval § 40.5(a)

Approval Made Available to Trade Determination § 40.5(a)

Approval Security Futures § 41.24(c)

Approval Amendments to enumerated agricultural products § 40.4(a), § 40.5(a)

“Non-Material Agricultural Rule Change” § 40.4(b)(5)

Notification § 40.6(d)

Official Name(s) of Product(s) Affected: See filing.

Rule Numbers: See filing.
300 Vesey Street New York, NY 10282 T 212 299 2200 F 212 301 4645 christopher.bowen@cmegroup.com cmegroup.com

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Christopher Bowen 

Managing Director and Chief Regulatory Counsel

Legal Department

February 27, 2023

VIA ELECTRONIC PORTAL

Mr. Christopher J. Kirkpatrick

Office of the Secretariat

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, N.W.

Washington, DC 20581

Re: CFTC Regulation 40.6(a) Rule Certification. Decrease of Spot Month Position Limits 

of Seven (7) Copper Futures and Option Contracts.

COMEX Submission No. 23-114

Dear Mr. Kirkpatrick:

Commodity Exchange, Inc. (“COMEX” or “Exchange”) is certifying to the Commodity Futures Trading 

Commission (“CFTC” or the “Commission”) a decrease of the spot month position limits of seven (7) copper 

futures and option contracts as noted below (the “Contracts”) effective on the close of business on March 

14, 2023 and commencing with the May 2023 contract month and beyond. 

(additions underscored; deletions struck through)

Contract Title Rule 

Chapter

Commodity 

Code

Reporting 

Level

Spot-Month 

Limit (In Net 

Futures 

Equivalents)

Single Month 

Accountability 

Level (In Net 

Futures 

Equivalents)

All Month 

Accountability 

Level (In Net 

Futures 

Equivalents)

Copper Futures 111 HG 25 1,000 600 5,000 5,000

Copper Option 117 HX 25 1,000 600 5,000 5,000

Copper Weekly 

Friday Option 1010 H1E-H5E 25 1,000 600 5,000 5,000

Copper Weekly 

Monday Option 1010 H1M-H5M 25 1,000 600 5,000 5,000

Copper Weekly 

Wednesday 

Option

1010 H1W-H5W 25 1,000 600 5,000 5,000

Copper Financial 

Futures 1190 HGS 25 1,000 600 5,000 5,000

Copper Average 

Price Option 1191 CAP 25 1,000 600 5,000 5,000

Federal Position Limits

The Copper Option, Copper Weekly Friday Option, Copper Weekly Monday Option and Copper Weekly 

Wednesday Option contracts are referenced contracts and are subject to federal position limits during the 

spot month. The core referenced futures contract is the Copper Futures contract (Commodity Code: HG; 

COMEX Rulebook Chapter: 111).
300 Vesey Street New York, NY 10282 T 212 299 2200 F 212 301 4645 christopher.bowen@cmegroup.com cmegroup.com

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Background

Historically, copper has been used in a wide array of applications and industries due to its resistance to 

corrosion, malleability, and its ability to conduct heat and electricity efficiently. These industries include 

construction, telecommunications, industrial machinery, electronics, and transportation. In recent years, 

usage in the transportation sector, in support of electric vehicles, has grown rapidly. 

Supply and Demand

According to the United States Geological Survey (USGS), as of 2020, annual global copper demand was 

approximately 28 million metric tons. To meet that demand, approximately 18 metric tons is from mine 

production, with the balance being met by recycled copper. Copper is nearly infinitely recyclable, and 

therefore it is highly unlikely that the world would ever deplete the copper supply. As of 2020, it was 

estimated that global reserves of copper were approximately 870 million metric tons, with total copper 

resources exceeding 5 billion metric tons. Reserves are considered to be discovered, evaluated, and 

assessed to be profitable, while resources include reserves, discovered deposits which are potentially 

profitable and undiscovered deposits predicted based on preliminary geological surveys.1

Electric Vehicles

The introduction of electric vehicles (EVs) to the market has, in some cases, increased the amount of 

copper needed for production by as much 273%. A traditional internal combustion engine vehicle requires 

about 49 pounds of copper, while a hybrid electric vehicle (HEV) requires approximately 85 pounds of 

copper, and a battery electric vehicle (BEV) requires 183 pounds.2 In 2013, EV sales represented only 

0.2% of all vehicle sales. That market share has increased to 13% in 2022, which has exponentially 

increased the amount of copper needed for vehicle production.3

Source: EV-volumes.com

Appendix C to part 38 of the Commission’s regulations defines deliverable supply as “the quantity of the 

commodity meeting the contract’s delivery specifications that can reasonably be expected to be readily 

1 Copper Demand and Long-Term Availability - Copper Alliance

2 A6191-ElectricVehicles-Factsheet.pdf (copper.org)

3 EV-Volumes - The Electric Vehicle World Sales Database
300 Vesey Street New York, NY 10282 T 212 299 2200 F 212 301 4645 christopher.bowen@cmegroup.com cmegroup.com

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available to short traders and saleable by long traders at its market value in normal cash marketing channels 

at the derivative contract’s delivery points during the specified delivery period, barring abnormal movement 

in interstate commerce.”

As of January 31, 2023, the 3-year average monthly copper inventory held at COMEX approved 

warehouses totaled 61,775 short tons, the equivalent of 4,942 COMEX Copper Futures contracts. Copper 

stocks, however, have been in a steady decline since mid-2022, and have decreased by 21% since 

October.

Copper Inventory in Exchange Approved Warehouses

Table 1. below provides the monthly average inventory levels of copper for the most recent three (3) year 

period stored at Exchange approved warehouses.

Table 1. Inventory at Exchange Approved Warehouses

Month

Average of 

Registered 

(ST)

Average 

of 

Eligible 

(ST)

Average 

of Total 

(ST)

Average 

Inventory 

in Contract 

Equivalents

Feb-20 28,280 1,026 29,306 2,345

Mar-20 26,648 2,331 28,979 2,318

Apr-20 34,075 5,540 39,614 3,169

May-20 39,015 11,325 50,340 4,027

Jun-20 52,523 20,934 73,456 5,876

Jul-20 72,606 15,952 88,558 7,085

Aug-20 82,723 4,869 87,592 7,007

Sep-20 79,688 2,070 81,758 6,541

Oct-20 77,335 1,653 78,988 6,319

Nov-20 79,685 1,985 81,670 6,534

Dec-20 73,919 4,810 78,729 6,298

Jan-21 71,810 5,211 77,021 6,162

Feb-21 55,761 12,360 68,120 5,450

Mar-21 57,945 12,667 70,612 5,649

Apr-21 53,634 14,873 68,508 5,481

May-21 50,319 13,058 63,377 5,070

Jun-21 45,765 8,686 54,451 4,356

Jul-21 43,643 2,452 46,095 3,688

Aug-21 45,571 2,243 47,814 3,825

Sep-21 49,934 2,643 52,577 4,206

Oct-21 53,448 3,013 56,461 4,517

Nov-21 53,991 4,508 58,498 4,680

Dec-21 56,476 5,439 61,915 4,953

Jan-22 67,105 10,970 78,075 6,246
300 Vesey Street New York, NY 10282 T 212 299 2200 F 212 301 4645 christopher.bowen@cmegroup.com cmegroup.com

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Feb-22 66,537 9,575 76,112 6,089

Mar-22 64,886 7,030 71,915 5,753

Apr-22 67,980 11,436 79,416 6,353

May-22 68,687 13,326 82,013 6,561

Jun-22 67,753 11,086 78,839 6,307

Jul-22 57,224 8,399 65,624 5,250

Aug-22 43,337 12,379 55,716 4,457

Sep-22 33,869 12,682 46,552 3,724

Oct-22 28,942 11,945 40,888 3,271

Nov-22 29,493 7,228 36,721 2,938

Dec-22 31,273 4,149 35,422 2,834

Jan-23 28,874 3,295 32,168 2,573

3-year 

average 53,910 7,865 61,775 4,942 

Source: CME Group

While the 3-year average inventory supports the current spot month position limit of 1,000 contracts, based 

on the continuing decline in copper inventory, the Exchange will decrease the spot month position limit for 

the Contracts from 1,000 contracts to 600 contracts which represents 12.14% of deliverable supply for the 

most recent 3-year period. The decrease of the spot month position limits of the Contracts shall be effective 

with the May 2023 contract month and beyond.

The Position Limit, Position Accountability and Reportable Level Table and Header Notes located in the 

Interpretations and Special Notices Section of Chapter 5 of the COMEX Rulebook (the “Table”) will be 

amended to reflect the amended spot month position limits of the Contracts. Exhibit A reflects the 

amendments to the Table as of March 14, 2023, the effective date of this submission and Exhibit B reflects 

the amendments to the Table effective on the close of business on April 27, 2023, the date that May 2023 

becomes the lead contract month (collectively, the “Rule Amendments”). Exhibits A and B are provided in 

blackline format under separate cover.

The Exchange reviewed the designated contract market core principles (“Core Principles”) as set forth in 

the Commodity Exchange Act (“Act”) and identified that the Rule Amendments may have some bearing on 

the following Core Principle:

Contracts Not Readily Subject to Manipulation: The Contracts are not readily subject to 

manipulation due to the deep liquidity and robustness in the underlying physical markets.

Position Limitations or Accountability: The speculative position limits for the Contracts as 

demonstrated in this submission are consistent with the Commission’s guidance.

Availability of General Information: The Exchange will make publicly available the details of the spot 

month position limit decreases by publishing a Market Surveillance Notice (“MSN”) to the market. The 

MSN will also be available on CME Group’s website.

The Exchange certifies that the Rule Amendments comply with the Act and regulations thereunder. There 

were no opposing views to the amendments to Chapter 5.

The Exchange certifies that this submission has been concurrently posted on the Exchange’s website at

http://www.cmegroup.com/market-regulation/rule-filings.html.
300 Vesey Street New York, NY 10282 T 212 299 2200 F 212 301 4645 christopher.bowen@cmegroup.com cmegroup.com

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Should you have any questions concerning the above, please contact the undersigned at 212-299-2200 or 

via e-mail at CMEGSubmissionInquiry@cmegroup.com.

Sincerely,

/s/ Christopher Bowen

Managing Director and Chief Regulatory Counsel

Attachments: Exhibit A – Amendments to COMEX Rulebook Chapter 5 Position Limit, Position 

Accountability, and Reportable Level Table (effective March 14, 2023) (under separate 

cover)

Exhibit B – Amendments to COMEX Rulebook Chapter 5 Position Limit, Position 

Accountability, and Reportable Level Table (effective close of business April 27, 2023) 

(under separate cover)
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Exhibit A

COMEX Rulebook

Chapter 5

(“Trading Qualifications and Practices”)

Position Limit, Position Accountability, and Reportable Level Table

(under separate cover)

(Effective close of business March 14, 2023)

Exhibit B

COMEX Rulebook

Chapter 5

(“Trading Qualifications and Practices”)

Position Limit, Position Accountability, and Reportable Level Table

(under separate cover)

(Effective close of business April 27, 2023)