Forexpros – Copper futures traded near a two-week low during European morning trade on Tuesday, after data showed China’s import growth slowed sharply in June, raising concerns over a “hard landing” in the world’s second largest economy.
Losses were limited amid expectations that relentlessly poor data from China will push policy makers to introduce fresh stimulus to support the economy.
On the Comex division of the New York Mercantile Exchange, copper futures for September delivery traded at USD3.425 a pound during European morning trade, easing down 0.2%.
It earlier fell by as much as 0.8% to trade at a session low of USD3.404 a pound. Prices hit USD3.398 on Monday, the lowest since June 29.
Fears over the global economic outlook intensified after official data showed that Chinese exports and imports in June slowed from the previous month, as weakening global demand weighed.
In a report, the Customs General Administration of China said the nation’s trade surplus widened to a three-year high of USD31.7 billion in June from USD18.7 billion in the previous month.
The report said that exports rose by 11.3% in June from a year earlier, slowing from 15.3% in May. Imports grew by 6.3%, significantly below expectations of 11.0% and slowing sharply from 12.7% in the previous month.
Normally a widening trade surplus is considered a good thing, but June’s result appeared more related to a weakness in imports, fuelling concerns over a slowdown in the world’s second largest economy.
Investors were looking ahead to Chinese economic data due out later this week, including second quarter growth figures, to gauge whether China is a heading towards a hard or a soft landing.
A deeper slowdown in China would impair a global expansion that is already faltering because of the ongoing debt crisis in the euro zone.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Meanwhile, traders continued to monitor developments out of the euro zone, amid sustained fears over the region’s ongoing debt crisis.
European finance ministers on Monday reached a deal to make EUR30 billion in aid available to assist Spain’s struggling banking sector by the end of the month, while also supporting plans to extend Spain’s deficit target deadline by one year to 2014.
Spain’s 10-year government bonds eased below the critical 7% threshold which is widely seen as unsustainable in the long-term.
Europe as a region is second in global demand for the industrial metal. Prices have tracked investor sentiment toward the euro zone’s debt crisis in recent months.
Elsewhere on the Comex, gold for August delivery eased up 0.05% to trade at USD1,589.55 a troy ounce, while silver for September delivery shed 0.35% to trade at USD27.34 a troy ounce.
Forexpros
