Copper pulls back on November 2
Copper prices lost momentum on November 2 after rising for seven consecutive trading days—the longest rising streak for copper in the past 18 months. At 12:45 PM EST on November 2, the COMEX copper futures contract for December delivery fell ~0.09% to $2.23 per pound. The weaker dollar and Chinese economic data are supporting copper prices.
Chinese PMI data improved sentiment in copper
The recently released better-than-expected Chinese economic data improved the demand signals for copper in China. The Chinese economic data release over the last month such as property data, industrial production, and GDP data failed to extend support to copper prices. Even though the GDP data was in line with the market’s expectations, industrial production and restriction of home sales weighed on copper prices. Despite better-than-expected real estate investment, copper failed to take support. Major cities are restricting home sales due to a rise in prices.
The manufacturing PMI data released at the beginning of this week extended support to copper. According to the Caixin manufacturing PMI data released on November 1, the manufacturing PMI for October rose to 51.2. It’s the highest PMI reading since July 2014. It’s better than the market’s expectation of 50.2. It’s also higher than the previous month’s reading of 50.1. Copper started the day on a weaker note, but recovered as the day progressed due to a fall in the US dollar. Read Copper Fell, Gold and Silver Are Strong Early on November 2 to learn how metals traded in the early hours.
On November 2, major copper producers such as Freeport-McMoRan (FCX), BHP Billiton (BHP), and Rio Tinto (RIO) fell ~4.8%, 1.7%, and 0.63%, while Glencore (GLNCY) rose ~0.34%. The SPDR S&P Metals & Mining ETF (XME) and the PowerShares DB Base Metals (DBB) fell ~2% and ~1.3%.