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Copper Dips to Two-Week Low on Poor Chinese Data

Summary:
Copper futures are trading lower on Tuesday as investors were disappointed by China’s industrial and vehicle sales for October. Financial markets are also cautious about an upcoming speech by President Donald Trump that many expect will provide clues on US-China trade talks. Despite the latest decline, the experts are becoming increasingly bullish on the industrial metal. December copper futures fell %excerpt%.01, or 0.38%, to .655 per pound at 14:18 GMT on Tuesday on the Comex division of the New York Mercantile Exchange. The red metal is now trading at its lowest level in two weeks, paring its year-to-date gain to under 0.5%. According to the National Bureau of Statistics, the nation’s producer price index (PPI) slumped 1.6% in October, recording the largest decline since July 2016. The PPI

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Copper futures are trading lower on Tuesday as investors were disappointed by China’s industrial and vehicle sales for October. Financial markets are also cautious about an upcoming speech by President Donald Trump that many expect will provide clues on US-China trade talks. Despite the latest decline, the experts are becoming increasingly bullish on the industrial metal.

December copper futures fell $0.01, or 0.38%, to $2.655 per pound at 14:18 GMT on Tuesday on the Comex division of the New York Mercantile Exchange. The red metal is now trading at its lowest level in two weeks, paring its year-to-date gain to under 0.5%.

According to the National Bureau of Statistics, the nation’s producer price index (PPI) slumped 1.6% in October, recording the largest decline since July 2016. The PPI is an indicator of corporate profitability.

It also reported that the annual inflation rate jumped to 3.8% last month, up from just 3% in September. This is the highest inflation has been since January 2012 and beats market forecasts of 3.3%.

The People’s Bank of China (PBOC) found that new bank loans tumbled to their lowest levels in nearly two years. Outstanding loans did expand 12.4% year-on-year, which is 0.1% lower than September’s figures and median estimates. This is an important statistic because it is a measurement of small- and medium-sized business (SMB) activity.

Markets were further disappointed by the continued contraction in vehicle sales. In October, vehicle sales dropped 4% from the same time a year ago, marking the 16th straight month of declines. One of the biggest surprises was the 45.6% slide in new energy vehicles.

Overall, however, the market is increasingly becoming bullish on copper. Recently, Europe’s largest copper producer Aurubis said during London Metal Exchange (LME) Week that growth in the electric vehicle market will support global copper demand. Aurubis CEO Roland Harings warned, however, that China’s growing smelting capacity could weigh on the red metal.

[Electric vehicles] will be bought by a huge part of the population. Society is changing and people are looking at their footprint.

The fundamentals for copper are very healthy, electric-mobility is growing and there is more infrastructure and charging points being built.

The data do support his premise. According to a new Commitments of Traders report, money managers’ net short positions total 17,838 contracts this month, down from 62,741 contracts last month. Their net long positions have surged from 39,870 in October to 61,835 in November.

Many experts have been sounding the alarm of a supply deficit caused by closing mines, slower output, and new operations slowly coming online due to bureaucratic red tape.

In other metal markets, December gold futures tumbled $4.40, or 0.3%, to $1,452.70 per ounce. December silver futures slipped $0.085, or 0.5%, to $16.715 an ounce. December platinum futures shed $8.70, or 0.99%, to $871.90 an ounce. December palladium futures advanced $12.00, or 0.72%, to $1,668.00 an ounce.

If you have any questions and comments on the commodities today, use the form below to reply.


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Andrew Moran
I am a full-time professional writer. Prior to my self-employment, I worked as a reporter for Digital Journal covering the politics beat and The Toronto Times reporting on the city’s entertainment scene. I currently write mostly about business, marketing and finance

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