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Copper is trading at 303 cents per pound; the metal is offside today after making three days of gains at the end of last week. In mid-March copper dropped to a 44-month low after China reported weak manufacturing figures followed by concerns that bad debts are mounting. Tonight, we are expecting two reports in relation to Chinese manufacturing; one is the official report from Beijing and the other is a survey conducted by HSBC. Some traders assign more weight to the HSBC report as it is seen as more impartial.
In February, the HSBC China manufacturing purchasing managers index (PMI) report dropped to an eight-month low. China is the world’s largest import of copper, and if the report shows a further contraction in the industry we could see the metal move towards the recent low of 291 cents per pound.
The 50-hour moving average of 302 cents per pound is providing support; if the Chinese central bank gives any indication of launching a stimulus package, we could see copper break the 304 cents per pound mark.