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It has been a bit of a tough week in the metal markets with most base metals seeing a steady decline over the past 5 trading days. Most notably was copper which has seen a gradual fall of over the week of AUD230/t as traders reacted to reports that the Chinese Government no longer sees property development as the core of urbanization. Additionally weak Chinese manufacturing data in February has also added to the weakened outlook for demand.  As previously noted China accounts for 40% of global copper consumption and is seen as a major influence in global demand and supply imbalance.

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NEW YORK–Copper futures rebounded Monday from the previous session’s 2013 low as the euro rose and data released over the weekend showed China’s manufacturing sector continued to expand this month.

Copper’s gains tracked a rise in the euro against the U.S. dollar following a successful Italian debt auction and optimism over elections there, analysts said. Dollar-denominated copper can catch a boost when the currency falls, as it makes the futures cheaper for buyers using other currencies.

Meanwhile, an initial gauge of Chinese manufacturing activity showed the sector remained in expansion mode this month, likely pointing to gains in copper demand. The preliminary HSBC China Manufacturing Purchasing Managers Index stood at 50.4 in February, compared with a final reading of 52.3 in January. Readings above 50 indicate expansion.

China accounts for about 40% of global copper consumption.Still, the recent slate of data from the No. 1 consumer has been mixed. China’s refined copper imports in January fell 27.5% from a year earlier, to 243,174 metric tons, the General Administration of Customs said Monday. Copper had slumped to a 12-week low on Friday, notching a seventh-consecutive decline amid weaker growth forecasts for Europe. “There does not seem to be any light at the end of the European recession tunnel,” INTL FCStone analyst Edward Meir said in a note. Copper prices were also pressured as Beijing signaled stricter controls on property purchases in an effort to limit speculation. Construction is a major driver of Chinese demand there.

 

 



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