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.
Copper is trading at 296 cents per pound, down 1.3% on the day, as trader close out their long positions after the advances made over the past two trading sessions.
Last week copper dropped to its lowest level in 44 months, partially due to weak manufacturing figures from China. In recent days there has been speculation that the People’s Bank of China will inject cash into the domestic banking system to make it easier for banks to lend to each other and so it will trickle down to businesses. China is the largest importer of copper in the world, accounting for 40% of global copper imports.
The Chinese central bank has not announced a stimulus package yet, but if they were to do so we could see copper head towards the recent highs of 301 cents per pound. At the moment the 200-hour moving average is providing support at 295 cents per pound.