The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Copper is trading at 302 cents per pound, down 1.1% on the day showing traders do not have high hopes for the monthly trade figures that are due from Beijing. On Monday, the HSBC survey of Chinese manufacturing came in at 48.1, when analysts were expecting a reading of 48.4. Any reading below 50.0 indicates the sector is in contraction territory.
China is a major importer of copper, and the country accounts for 40% of global copper imports. If traders feel that China’s appetite for the red metal is low they often sell in advance of the announcement.
Overnight China will report the trade figure for April, and the consensus is for a trade balance of $15.2 billion. Imports are anticipated to improve from last month but exports have already declined in the past two; will this be the third straight month of declines?
If China reveals soft trade figures we could see copper fall below the 300 cents per pound mark, last seen in April. On the upside, the metal could target the more recent high of 307 cents per pound.