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Copper Plunges 2% on Weak Chinese Economic Data

November 14, 2017 at 17:39 by Andrew Moran

Copper futures tumbled as much as 2% on Tuesday after investors combed through the weaker-than-expected Chinese economic data. With the industrial metal surging in 2017, many traders do not believe that copper prices will be able to continue the rally for the rest of 2017 and next year.

December copper futures slipped $0.058, or 1.88%, to $3.058 per pound at 16:23 GMT on Tuesday on the Comex division of the New York Mercantile Exchange. Copper prices have been trading above a one-month low, and they have advanced more than 20% year-to-date.

Analysts fear that the economic slowdown in China will impact copper prices for the remainder of 2017 and into next year. China is the world’s biggest consumer of the red metal, purchasing about half of the planet’s supply.

The Wall Street Journal reported that the latest data highlighted sluggish growth in industrial production and fixed-asset investment last month. The industrial output was the second-slowest of 2017, and there are not any signs to suggest that this trend will reverse.

During the winter period, Chinese demand for copper is usually weak. With tighter credit controls and a crash in the nation’s property market bubble, the world’s second-largest economy is having a difficult time trying to ramp up growth.

For much of 2017, copper prices have benefited from strong Chinese demand, production stoppages in Latin America and Southeast Asia, and bullish reports that suggest electrical vehicles will significantly boost demand for copper.

Any further losses in copper prices were capped by a lower US dollar as the greenback slid 0.53%. A weaker US dollar is good for dollar-denominated commodities like copper because it makes it cheaper for foreign investors to purchase.

Other metals are bleeding red ink on Tuesday. December gold futures dipped $0.20, or 0.02%, to $1,278.70 an ounce. December silver futures dropped $0.02, or 0.16%, to $17.02 per ounce. January platinum futures fell $8.70, or 0.93%, to $926.90 per ounce. December palladium futures declined $7.86, or 0.80%, to $982.20 an ounce.

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