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Copper futures decline with global manufacturing PMI’s in focus

Published 01/24/2013, 05:10 AM
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Investing.com - Copper futures were lower in rangebound trade during European morning hours on Thursday, as market players digested a flurry of manufacturing data out of China and the euro zone.

On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.675 a pound during European morning trade, down 0.25% on the day.

New York-traded copper prices held in a tight range between USD3.670 a pound, the daily low and a session high of USD3.689 a pound.

Copper prices found support after data showed that China’s HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, rose to a 24-month high of 51.9 in December from a final reading of 51.5 in November.

The upbeat data added to the view that China’s economy is gaining momentum. The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Meanwhile, in the euro zone, the region’s manufacturing PMI rose to a 10-month high of 47.5 in January from a final reading of 46.1 in December, while Germany’s manufacturing purchasing managers’ index rose to 48.8 from 46.0 in December.

However data indicated that France, the bloc’s second largest economy, may be in a recession. The French manufacturing PMI fell to a four-month low of 42.9 this month, while the services PMI came in at 43.6.

Europe as a region is second after China in global demand for the industrial metal and worries over its economic growth have kept copper prices under pressure in recent months.

In supply news, Chilean mining giant Codelco said earlier that the global copper market faces a surplus that may push down prices toward the end of the year.

The forecast comes a day after BHP Billiton said copper production at its Escondida mine in Chile rose 31% from a year earlier to 161,500 tons in the three months ended December 31, while refined copper output in China jumped 22% in December from a year ago to a record 580,000 tonnes.

Elsewhere on the Comex, gold for February delivery shed 0.6% to trade at USD1,676.45 a troy ounce, while silver for March delivery dropped 1.9% to trade at USD31.81 a troy ounce.

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