Copper settled down -0.96% at 424.55 edged lower on Wednesday, as ongoing concerns over the health of China’s economy dampened appetite for growth-linked assets. Data released earlier in the week showed that factory growth in China slowed last month, indicating a recovery in the broader economy remains fragile and may need further government stimulus. China’s official manufacturing index ticked down to 51.1 from 51.7 in July, while the HSBC manufacturing index slowed to 50.2 from 50.3 the previous month. China’s copper premium has declined sharply in response to falling Chinese bonded warehouse stocks as demand for trade financing has weakened following investigations by Chinese authorities into the fraudulent use of commodities as loan collateral in inventory financing deals. China’s refined copper imports declined by 16% y/y in July, which may reflect weaker financing and/or end-user demand. This comes despite Chinese copper future prices, which are higher than LME prices, currently favouring Chinese copper imports. The falling premium in Europe and the US may reflect growing copper surplus concerns, particularly as Freeport’s Grasberg copper mine in Indonesia recommences concentrate exports. China’s copper import data for July is in line with recent economic data, which indicates slowing growth in investment, industrial production and manufacturing. It may indicate that if China’s underlying economy slows, the growing scrutiny on China’s copper financing trade may weaken China’s apparent copper demand further and keep copper prices under pressure. Technically market is under fresh selling and getting support at 422 and below same could see a test of 419.4 level, And resistance is now likely to be seen at 428.5, a move above could see prices testing 432.4.

Trading Ideas:

Copper trading range for the day is 419.4-432.4.

Copper prices ended with losses as ongoing concerns over the health of China’s economy dampened appetite for growth-linked assets.

Pressure also seen as investors downplayed signs of progress towards peace in eastern Ukraine while tin slid to a eight-month low on worries about oversupply.

Data showed new orders for U.S. factory goods posted a record gain in July and auto sales last month accelerated to their highest level in 8-1/2 years