FX:Copper futures retreat from 1-week high on China, EZ PMI data
Forexpros - Copper futures retreated on Wednesday, easing off a one-week high as disappointing manufacturing data from China and the euro zone dampened sentiment on the industrial metal.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.812 a pound during European morning trade, slumping 0.64%.
It earlier fell by as much as 0.7% to trade at a session low USD3.811 a pound.
On Tuesday, prices rallied nearly 2.6% to hit a one-week high of USD3.851 after euro zone finance ministers approved a second bailout package for Greece.
But prices failed to extend gains in Asian trading Wednesday as investors remained wary over Greece’s ability to implement strict austerity measures in compliance with its new bailout deal.
Prices came under pressure after a preliminary estimate of HSBC’s China manufacturing Purchasing Managers’ Index showed an improvement from January, but remained in contractionary territory for the fourth consecutive month.
HSBC's chief China economist warned that China's economy "remains on track for a slowdown" and said more stimulus measures are needed.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year. Fears over a slowdown in the world’s second-largest economy raised concerns over prospects for future demand for the industrial metal.
Disappointing manufacturing data from the euro zone also weighed. A report released earlier showed that manufacturing activity in Germany slowed to the lowest level in two months in February.
A separate report showed that manufacturing activity in the euro zone remained in contraction territory for the seventh consecutive month in February.
Europe as a region is second after China in global demand for the industrial metal and worries over its economic growth have kept copper prices under pressure in recent weeks.
Meanwhile, prices found support amid concerns over a disruption to global supplies after mining was halted at Chile’s Collahuasi mine after a worker died in an accident at its sulfide plant on Monday.
Collahuasi is the world’s third-largest copper mine, producing nearly 3% of world supplies. It is jointly owned by copper giants Anglo American and Xstrata.
The mine was hit a by a number of work stoppages, severe weather and accidents last year, triggering a 10% drop in output to a little over 453,000 tonnes, the lowest production figure since 2007.
Elsewhere on the Comex, gold for April delivery dipped 0.2% to trade at USD1,754.95 a troy ounce, while silver for March delivery tumbled 1.05% to trade at USD34.06 a troy ounce.
