Copper slides ahead of Chinese manufacturing

Copper is in the red ahead of China manufacturing reports that are due out overnight.

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.

High Grade Copper chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material 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. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.