During the European morning trade on the Comex division of the New York Mercantile Exchange copper for July delivery fell 2,3% on the day and traded at $3,302 a pound.
Copper price was strongly influenced by the Advance Manufacturing Purchasing Managers’ Index for China, conducted by Markit Economics and HSBC Holdings Plc,for May. The indicator dropped to 49,6, which is a negative value as 50 is the neutral point. It is the lowest value since October and is below forecasts. The negative outlook for Chinas factory output pressured down copper as it is widely used in the Asian nations manufacturing sector. China is the metals biggest consumer and fluctuations in its economy activity pressure global copper prices.
Ken Peng, a BNP Paribas SA economist based in Beijing, said for Bloomberg: “The slowdown is really bad. It’s a big probability now that China’s GDP growth rate in the second quarter will be lower than in the first quarter.”
Copper came under pressure on Wednesday by the strengthened greenback after yesterday Ben Bernanke, Fed chairman, said the U.S. may scale back its monetary easing measures in the next few meetings, if the labor market improves further. He said the Quantitative Easing program is currently providing “significant benefits”. Meanwhile at the release of the Fed minutes yesterday it came to notice that some policy makers think the stimulus measures should be scaled down in June. Strengthening of the dollar tends to decrease the prices of the dollar-priced commodities as it makes the greenback more attractive for investors. Also a more expensive dollar makes commodity prices costlier for foreign currency holders.
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