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Copper Futures Flat as Investors Weigh Chinese Economy

May 16, 2017 at 16:50 by Andrew Moran

Copper prices are trading flat on Tuesday as investors comb through recent Chinese economic data. The lackluster economic numbers in China prompted immense selling of the industrial metal.

July copper futures rose $0.0075, or 0.30%, to $2.546 per pound at 16:33 GMT on Tuesday on London’s ICE Futures exchange. The red metal has had an interesting start to May – it experienced a freakish spike to kick off the month, but has since traded sideways. Year-to-date, copper prices are up just 1%.

Despite a strong start to 2017, China’s economic growth experienced a hiccup in April. Since China has tapered its stimulus to help the national economy, there has been tepid growth and weaknesses in certain parts of the market.

Moreover, in the last month, efforts have been established to reduce significant debt risks to prevent a massive hit to the economy. Beijing has been introducing risk controls, restructuring proposals and reforms after a slowdown in key macro data points. The federal government has been looking to offload much of its debt that it has taken on since the economic collapse.

Investors are now weighing their options pertaining to the world’s second-largest economy.

The industrial metal is being supported by a sliding US dollar. The greenback slipped 0.63% to a six-month low. A weaker US dollar is good for commodities like gold, silver, and copper because it makes it cheaper for foreign investors to purchase.

Copper prices have been declining over the past month because of supplies returning to normal. With some of the world’s largest copper prices ending worker disputes and restarting operations, the supply outlook for the red metal is now positive. The demand remains a concern because it is unclear if governments, like the US, UK, and Canada, will be launching their infrastructure projects anytime soon.

Other metals are surging on Tuesday. June gold futures jumped $7.20, or 0.59%, to $1,237.20 per ounce. July silver futures increased $0.12, or 0.76%, to $16.73 an ounce.

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