The most-traded March copper contract on the Shanghai Futures Exchange fell 1.4 percent to 41,010 yuan ($6,618) a tonne on Friday, having come off losses of more than 2 percent. ShFE copper open interest climbed by 18,000 lots as prices sank overnight suggesting fresh short positions had been opened, a trader in Singapore noted, flagging the potential for shorts to cover.
China's manufacturing growth stalled for the second straight month in January and companies had to cut prices at a faster clip to win new business, adding to worries about growing deflationary pressures in the economy, a private survey showed. The data fuelled concerns about copper demand, tempering the effect of bond buying by the European Central Bank (ECB) which could offer support.
"We are now seeing consolidation," said analyst Joel Crane of Morgan Stanley in Melbourne. "There's a strong possibility that ECB QE (quantitative easing) could put a floor under some of these commodity prices ... when the dust settles and people start having a look at asset classes that are mispriced, LME metals might show up on that radar."
Comments
Comments are closed.