Copper settled -0.23% down at 440.05 recovered from the day's low of 436.2 as sentiment remained mildly supported by Monday's strong US manufacturing data, while investors continued to eye developments in Spain. Data on Monday showed that US manufacturing activity expanded in September for the first time in four months, easing concerns over a slowdown in global growth. The ISM's US manufacturing purchasing managers' index beat expectations in September, rising to 51.5 from 49.6, compared to expectations for a reading of 49.7. Meanwhile, market players continued to focus on developments in Spain after reported that the debt-strapped country is prepared to request a full-scale bailout as soon as soon as next week, but Germany is urging Madrid to wait. A bailout would allow the ECB to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation. Investors were also expecting ratings agency Moody’s to announce the results of a ratings review on Spain. Moody’s said in August its review on Spain’s Baa3 rating would continue through the end of Sept. A move below Baa3 would drop Spain’s debt into junk. Now support at 436.9, a break below could see a test of 433.7 and where as resistance is now likely to be seen at 442.6, a move above could see prices testing 445.1.

Trading Ideas:

Copper trading range for the day is 433.7-445.1.

Copper drops as more evidence of shrinking factory activity in China and renewed worries over Spain weighed on prices

With markets in China closed for a week-long holiday, volumes are thin and metals are unlikely to stage dramatic moves

The unexpected expansion in the U.S. manufacturing sector in September helped lift most prices