Disappointing trade data from China caused copper futures to fall 2.2% this week, contributing to an overall downward trajectory for futures this month.
Copper’s losses this week came after China, a top consumer of the metal, announced that exports unexpectedly dropped 1.8% in April on an annualized basis while imports decreased by 10.9% year-over-year, according to a report from Economic Calendar.
“Adding extra impetus to Monday’s losses was a stronger greenback,” wrote strategist Donald Levit of Economic Calendar. “The U.S. dollar climbed versus its rival currencies on Monday even after Friday’s disappointing jobs report. With copper a dollar-denominated commodity, a stronger greenback makes the metal more expensive for holders of international currencies.”
Levit added that overall, the forward momentum that propelled copper and other industrial metals higher during the first quarter of the year appears to be regressing. This can be partially attributed to the conclusion of China’s seasonal copper stockpiling coupled with the belief that China stockpiled most of the metal it imported earlier this year.
Copper MMI Holds Steady
According to our own Raul de Frutos, copper prices have trended higher since they hit seven-year lows in January, but the metal still hasn’t gained as much as other base metals like zinc or tin.
“Improvements in commodity markets made copper prices stop from falling, but investors are not yet excited enough to trigger a bull run in copper prices,” de Frutos wrote.
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