FX:Copper futures inch higher, gains limited on China concerns
Forexpros - Copper futures inched higher on Thursday, recouping some of the previous day’s sharp decline, but gains were limited amid renewed concerns over China’s economic growth outlook.
On the Comex division of the New York Mercantile Exchange, copper futures for May delivery traded at USD3.856 a pound during European morning trade, edging up 0.19%.
It earlier rose by as much as 0.45% to trade at a session high USD3.865 a pound. Prices dropped nearly 2% on Wednesday to settle at a three-day low of USD3.837.
Concerns over China’s growth outlook resurfaced after Premier Wen Jiabao said on Wednesday that China must embrace slower growth and bolder political reform to keep its economy from faltering.
He also dampened hopes for any near-term easing measures in the country's property sector. Construction and real estate sales are key drivers of China's growth.
Global financial service provider JP Morgan said in a report published Wednesday that China’s economy is already in a so- called “hard landing.”
“China is in a hard landing. Car sales are down, cement production is down, steel production is down, construction stocks are down,” the bank said in a report.
The Asian nation last week lowered its economic growth expansion target to 7.5%, down from 8% over the past seven years.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
The industrial metal is sensitive to the economic growth outlook because of its widespread uses in construction and manufacturing.
Meanwhile, ongoing strength in the U.S. dollar also weighed on prices. The greenback has strengthened since the Fed upgraded its outlook on the U.S. economy on Tuesday, causing investors to trims back expectations for a third round of quantitative easing by the central bank.
But sentiment found support ahead of the expected approval of a EUR28 billion loan by the International Monetary Fund for debt-strapped Greece.
The IMF executive board is expected to approve the loan on Thursday, bringing to a close a couple of months of worries about whether Greece would have a disorderly default.
Europe as a region is second in global demand for the industrial metal. Prices have tracked investor sentiment toward the euro zone’s debt crisis in recent months.
Elsewhere on the Comex, gold for April delivery added 0.15% to trade at USD1,645.35 a troy ounce, while silver for May delivery eased up 0.15% to trade at USD32.23 a troy ounce.
