Forexpros – Copper futures rose on Tuesday, rebounding from the lowest level since mid-February after Chinese trade data showing a slowdown in import and export growth fueled speculation Beijing will ease monetary policy to prop up the world’s second largest economy.
On the Comex division of the New York Mercantile Exchange, copper futures for May delivery traded at USD3.736 a pound during European morning trade, gaining 0.43%.
It earlier rose by as much as 1% to trade at a session high of USD3.782 a pound.
Prices fell to as low as USD3.705 on Monday, the lowest since February 17 as investor confidence was rattled in the wake of Friday’s disappointing U.S. nonfarm payrolls report, which showed the weakest pace of jobs growth in five months.
Prices regained strength as investors mulled the implications of a report showing China’s trade balance swung to an unexpected surplus of USD5.3 billion last month, from a deficit of USD31.5 in February.
Imports grew 5.3% in March, decelerating sharply from February’s 39.6% increase. Slowing imports suggest some exports slowdown in coming months as well as a domestic slowdown.
The relatively weak data triggered expectations that Chinese officials will unveil fresh easing measures at Wednesday’s regular meeting of the State Council.
Market participants will now shift their attention to China’s gross domestic product growth data for the first quarter, which is due to be released Friday.
Investors have been searching for clues in regards to Chinese growth prospects amid fears the country is headed towards a ‘hard landing’. China lowered its GDP growth target for this year to 7.5% last month, the lowest in eight years.
The trade data came a day after official data showed that consumer price inflation in China accelerated by 3.6% in March, up from 3.2% in February and above expectations for a 3.3% increase.
A deeper slowdown in China, the world’s second biggest economy, would impair a global expansion that is already faltering because of the implementation of harsh austerity measures in Europe.
However, gains were limited amid indications Chinese demand for the industrial metal was slipping. China’s imports of copper fell 4.6% to 462,182 metric tons in March from 484,569 metric tons the previous month.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Meanwhile, copper prices came under additional pressure amid concerns over the global economic outlook. Copper is sensitive to the economic growth outlook because of its widespread uses across industries.
Elsewhere on the Comex, gold for June delivery edged up 0.1% to trade at USD1,645.05 a troy ounce, while silver for May delivery was flat to trade at USD31.51 a troy ounce.
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