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Copper Struggles at 3-Week Lows amid Weak Chinese Imports

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Aug. 9 2016, Published 7:01 a.m. ET

Copper sentiment weakened 

After starting the week on a positive note by gaining in the early morning hours on August 8, copper prices pared some gains and struggled at three-week low price levels. At 1:30 PM EST on August 8, the COMEX copper futures contract for September delivery was trading at $2.17 per pound—a gain of ~0.51%.

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Disappointing Chinese copper imports

According to the data released by China’s General Administration of Customs, China’s copper imports in July fell to 360,000 tons. This is a 14% drop from June’s copper imports due to less demand in the summer. Similarly, Chinese imports and exports fell in July. According to China’s General Administration of Customs, the trade balance for July was a surplus of $52.31 billion—better than the market’s expectations of $47.6 billion. However, exports fell 4.4% and imports fell 12.5%—worse than the market’s expectations.

China’s weaker-than-expected import and export data for July intensified the hopes of monitory stimulus by China’s central bank and supported the prices to some extent on August 8. The economic situation in China impacts copper’s price and demand trends—China’s the largest copper consumer. Read China’s July Trade Data: Anything in There for US Investors? to learn more about China’s trade data and its influence on metal markets.

At 1:45 PM EST on August 8, major copper producers Freeport-McMoRan (FCX), Glencore (GLNCY), BHP Billiton (BHP), and Rio Tinto (RIO) gained ~1.7%, ~1.8%, ~1.6%, and ~1.4%, respectively. The SPDR S&P Metals & Mining ETF (XME) and the PowerShares DB Base Metals (DBB) gained ~0.45% and ~0.22%.

In the next part, we’ll discuss how gold performed on August 8.

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