Copper falls ahead of FOMC minutes, China data in focus

Copper fell for a third straight day amid speculations FOMCs July meeting minutes may indicate an earlier-than-expected stimulus tapering may begin in September. Market players also eyed upcoming trade and manufacturing data from world top consumer China.

On the Comex division of the New York Mercantile Exchange, copper futures for September delivery fell to $3.312 per pound at 8:36 GMT, down 0.78% on the day. Prices ranged between days high and low of $3.333 and $3.313 per pound respectively. The industrial metal fell 0.3% on Tuesday, extending current weeks decline to nearly 1.5%.

Copper marked third day of losses as investors remained ambivalent about their expectations regarding Quantitative Easing tapering with the FOMCs July meeting protocols coming later in the day. According to a Bloomberg survey of economists, 65% of the participants expected that the Federal Reserve will start trimming its $85 billion per month bond purchases after FOMC’s September meeting.

Meanwhile, investors also eyed upcoming China manufacturing data due on Thursday to further gauge the industrial metal’s demand prospects. Signs for an increase or decline in the Asian country’s industrial activity cause strong fluctuations in copper pricing as the metal is widely used in China’s vast manufacturing sector. The nation accounts for around 40% of global consumption.

The Chinese HSBC Manufacturing PMI, prepared by HSBC Holdings Plc and Markit Economics, is expected to surge to 48.3 in August from a 47.7 reading in July. Levels below 50 indicate contraction in the respective sector. Flash figures are released approximately six business days prior to the end of the month. The final reading, as well as the government statistics, will be released on September 1. Monthly Report on China’s Non-manufacturing Purchasing Managers Index is due at September 3.

Later on Wednesday, the Chinese Customs General Administration will release data today for July imports and exports of non-ferrous metals including copper.

Wu Jianguo, an analyst at Maike Futures Brokerage in Shanghai, said for Bloomberg: “The market is looking for a direction from upcoming economic data. Copper prices could climb further if the PMI figures tomorrow continue showing a recovery.”

Market players will also be looking ahead at the upcoming data to further gauge the U.S. economic activity and the industrial metals demand prospects. On Wednesday, July’s Existing Home Sales are expected to have risen to 5.13 million, up from June’s 5.08 million. On Thursday, last week’s Initial Jobless Claims likely rose by 10 000 to 330 000, while the Markit Flash U.S. Manufacturing PMI for August is projected to have advanced to 54.0 from July’s 53.7. On Friday, July’s New Home Sales are expected to have declined to 0.490 million houses sold, down from 0.497 million in the preceding month.