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Copper Adds to Losses Amid Slowing Chinese Growth

July 17, 2018 at 16:10 by Andrew Moran

Copper futures are adding to their losses on Tuesday after disappointing second quarter economic data from China. Despite low inventories and technical support, the industrial metal was unable to rebound from its latest 2018 lows.

September copper futures slumped $0.0125, or 0.45%, to $2.752 per pound at 15:47 GMT on Tuesday on the New York Mercantile Exchange. Copper prices advanced to kick off the trading session, but they have since pared those gains, falling to their lowest levels since August 2017.

Year-to-date, copper is down nearly 20%.

China, the world’s biggest consumer of copper, representing as much as 60% of global demand, reported sluggish expansion in the April-to-June period. The world’s second-largest economy suffered slower financial activity, weaker factory output growth, and investment sliding to a two-year low. Analysts are blaming the brewing trade war with the US for the lackluster economic growth and the government slashing its debt volumes.

On the news, investors are shorting the red metal. According to the Commodity Futures Trading Commission (CFTC), there are 12,919 net short position contracts, the highest since December 2016.

Copper’s losses were capped by warehouses registered with the London Metal Exchange (LME) reporting their lowest inventories in seven months, gaining just 1,525 tonnes to 257,200 tonnes. There may have been additional support on concerns that a production disruption might happen in the coming months, especially as Chile is on the brink of a supply stoppage as union workers threaten strike action.

In other metal commodities, August gold futures shed $11.00, or 0.89%, to $1,228.70 per ounce. September silver futures cratered $0.18, or 1.15%, to $15.637 an ounce. September platinum futures dropped $4.90, or 0.59%, to $821.50 an ounce. September palladium futures dipped $5.90, or 0.65%, to $907.60 per ounce.

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