Copper down on fears of weaker demand

Surprisingly downbeat reports from France and China pulled copper futures down.

The major influence affecting the financial markets today stems from the various releases of soft data from China that we have seen today and over the weekend; this is true for the forex market, the stock market and various commodities that are tied to risk appetite, including copper.

News out over the weekend revealing that Chinese exports slumped last month by the largest amount since 2009 (including a 30% fall in imports of unwrought copper) had earlier dragged May copper futures as low as $2.9955 a pound, the lowest level touched by the most-liquid futures contract since June of last year.

After Friday’s weak showing, at those levels, copper was in danger of completing its worst two-day performance since 2011. The situation was exacerbated by weak French industrial production figures, which showed output falling 0.1% year-on-year in January, when consensus estimates had pointed to a small increase.

Futures did mount something of a recovery, though, to settle at $3.0315, and in electronic trading carried on regaining ground to stand at $3.0402 per pound by mid-afternoon in New York.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.