Copper was down today as the red metal closed out a month that saw it almost entering bear market territory.
Copper was trading down across the board on the Comex, with June, the most active market, dropping to an intraday low of $3.17 per pound, from an open of $3.22.
Benchmark three-month copper on the London Metal Exchange closed at $7,055 a tonne Tuesday, from a close of $7,153.50 a tonne on Monday, a week after the commodity fell to $6,762.25 a tonne, the metal’s lowest point in eighteen months. For the month, copper prices on the LME fell 6.4 per cent, the commodity’s steepest monthly loss since last May.
The results come the same month that copper almost entered bear market territory, hitting an intraday low on April 17 of $3.1755 on the Comex, a drop of more than 20 per cent from the commodity's peak.
Reasons for copper’s recent slide include recently released official data showing the US economy grew at a weaker-than-expected rate in the first three months of the year, reinforcing market anxiety concerning general economic outlook, and rendering copper traders wary. The US is the only nation that accounts for a bigger slice of the world-wide demand for copper than China - demand largely driven by construction and manufacturing.
Trade is also muted ahead of key manufacturing data due from China later in the week, which should give some indication of the demand to be expected from the world’s largest consumer of copper.
The data, the official Chinese Purchasing Managers' Index (PMI) for April, is to be released on Wednesday and is the subject of considerable interest as talk of a slowdown in the Chinese economy gains momentum. The PMI is especially pertinent to copper traders as an indicator of demand as the metal has so many industrial uses.
Certain Canadian copper producers suffered from the slump, with Los Andes Copper Limited (CVE:LA) dropping 4 cents per share, down 14 per cent, and Quaterra Resources Inc. (CVE:AGM) down 2 cents for the day, a fall of more than 11 per cent.
Oracle Mining Corp. (TSE:OMN) was down more than 10 per cent, losing 6 cents to hit a day low of 49 cents per share.
First Quantum Minerals (TSE:FM) hit a low of $16.70 today, from an open of $16.99, but later swung back into positive territory.
However, change could be just over the horizon with Chinese markets, closed for Golden Week, to reopen on Thursday.
Other results awaited include the outcome of Thursday’s European Central Bank’s policy and the report on U.S. nonfarm payrolls due Friday.