Investing.com - Copper futures came under heavy selling pressure on Thursday, tumbling to the lowest level in two weeks as weak manufacturing data pointing to a slowdown in China and the euro zone dampened sentiment on the industrial metal.
On the Comex division of the New York Mercantile Exchange, copper futures for May delivery traded at USD3.777 a pound during European morning trade, tumbling 1.75%.
It earlier fell by as much as 2.05% to trade at USD3.771 a pound, the lowest since March 8.
Copper prices came under heavy selling pressure following the release of a preliminary estimate of HSBC’s China manufacturing Purchasing Managers’ Index, which fell to a four-month low and remained in contractionary territory for the fifth consecutive month.
The soft PMI data marked the latest in a string of negative headlines on China's economic outlook.
Beijing recently downgraded its growth outlook for 2012, while investors were spooked by a large trade deficit for February and comments this week from mining giant BHP Billiton that demand for iron ore will flatten amid a slowdown in China's economy.
A deeper slowdown in China, the world’s second biggest economy, would impair a global expansion that is already faltering because of the implementation of harsh austerity measures in Europe.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Copper prices accelerated losses after data showed that German manufacturing activity dropped to a four-month low, while manufacturing in France also contracted.
A separate report showed that manufacturing activity in the euro zone slumped unexpectedly in March, remaining in contraction territory for the eighth consecutive month.
Renewed concerns over the fiscal health of debt-laden euro zone members, Spain, Portugal and Italy also weighed.
Italian and Spanish debt yields continued their march higher, amid concerns over Spain’s slow progress in boosting its finances, while Italy faced stiff opposition to its severe austerity steps, with the country's largest trade union calling a general strike over labor reforms.
Meanwhile, Portugal is braced for a 24-hour general strike against the government’s austerity measures introduced by the government in return for the country’s EUR78 billion bailout.
Europe as a region is second in global demand for the industrial metal. Prices have tracked investor sentiment toward the euro zone’s debt crisis in recent months.
The dollar strengthened broadly as investors sought safety amid growing concerns over the global economy.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.31% to trade at 80.06, erasing earlier losses of as much as 0.2%.
A stronger dollar reduces demand for raw materials as an alternative investment and makes dollar-priced commodities more expensive for holders of other currencies.
The industrial metal is regarded as a leading indicator of the global economy. It is used in the construction of buildings, power generation and transmission and the manufacture of consumer electronics.
Elsewhere on the Comex, gold for April delivery dropped 0.82% to trade at USD1,636.75 a troy ounce, while silver for May delivery tumbled 1.15% to trade at USD31.86 a troy ounce.
On the Comex division of the New York Mercantile Exchange, copper futures for May delivery traded at USD3.777 a pound during European morning trade, tumbling 1.75%.
It earlier fell by as much as 2.05% to trade at USD3.771 a pound, the lowest since March 8.
Copper prices came under heavy selling pressure following the release of a preliminary estimate of HSBC’s China manufacturing Purchasing Managers’ Index, which fell to a four-month low and remained in contractionary territory for the fifth consecutive month.
The soft PMI data marked the latest in a string of negative headlines on China's economic outlook.
Beijing recently downgraded its growth outlook for 2012, while investors were spooked by a large trade deficit for February and comments this week from mining giant BHP Billiton that demand for iron ore will flatten amid a slowdown in China's economy.
A deeper slowdown in China, the world’s second biggest economy, would impair a global expansion that is already faltering because of the implementation of harsh austerity measures in Europe.
China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
Copper prices accelerated losses after data showed that German manufacturing activity dropped to a four-month low, while manufacturing in France also contracted.
A separate report showed that manufacturing activity in the euro zone slumped unexpectedly in March, remaining in contraction territory for the eighth consecutive month.
Renewed concerns over the fiscal health of debt-laden euro zone members, Spain, Portugal and Italy also weighed.
Italian and Spanish debt yields continued their march higher, amid concerns over Spain’s slow progress in boosting its finances, while Italy faced stiff opposition to its severe austerity steps, with the country's largest trade union calling a general strike over labor reforms.
Meanwhile, Portugal is braced for a 24-hour general strike against the government’s austerity measures introduced by the government in return for the country’s EUR78 billion bailout.
Europe as a region is second in global demand for the industrial metal. Prices have tracked investor sentiment toward the euro zone’s debt crisis in recent months.
The dollar strengthened broadly as investors sought safety amid growing concerns over the global economy.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.31% to trade at 80.06, erasing earlier losses of as much as 0.2%.
A stronger dollar reduces demand for raw materials as an alternative investment and makes dollar-priced commodities more expensive for holders of other currencies.
The industrial metal is regarded as a leading indicator of the global economy. It is used in the construction of buildings, power generation and transmission and the manufacture of consumer electronics.
Elsewhere on the Comex, gold for April delivery dropped 0.82% to trade at USD1,636.75 a troy ounce, while silver for May delivery tumbled 1.15% to trade at USD31.86 a troy ounce.