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Why Is Copper Weak This Morning?

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Copper is trading lower 

Copper levels look weak this morning despite support from stable crude oil prices. At 8:09 AM EST, the COMEX copper futures contract for July delivery was trading at $2.24 per pound—a loss of 0.89%. Rising inventories in China are putting pressure on copper prices.

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Copper stockpiles increase in Asia

Decreased optimism about China along with increased copper stock levels in Asia weighed on the copper prices on April 25. Positive economic releases from China like fixed-asset investments, factory data, new loans, and retail sales spiked positive sentiment around copper. However, the recent surge in copper inventories in Asia is keeping pressure on copper prices. Copper inventories stood at 72,675 tons—the highest level since January 20. China’s next important economic release is the manufacturing purchasing managers’ index. It’s scheduled to release this weekend.

Investors focus on the FOMC meeting

Recently, optimism about China due to positive economic releases supported copper sentiment and prices. Currently, copper investors shifted their focus to the outcome of the FOMC (Federal Open Market Committee) meeting. The official FOMC statement will be released at 2 PM EST on April 27. Copper started this week on a weaker note. It fell on April 25. It took mining stocks and ETFs lower. Read Why Does Copper Look Weak This Morning? to learn more about how copper started this week.

On April 25, major copper producers Freeport-McMoRan (FCX), Glencore (GLNCY), BHP Billiton (BHP), and Rio Tinto (RIO) fell by 2.7%, 4.4%, 4.0%, 3.5%, respectively. The Power-Shares DB Base Metals Fund (DBB) and the SPDR S&P Metals & Mining ETF (XME) fell by 1.1% and 2.6%, respectively, on April 25.

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