Markets

Copper futures edge lower after China imports decline

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Shutterstock photo

Shutterstock photo

Investing.com -

Investing.com - Copper futures edged lower on Monday, after data showed that China's imports of the red metal slowed in August.

On the Comex division of the New York Mercantile Exchange, copper for December delivery dipped 0.16%, or 0.5 cents, to trade at $3.164 a pound during European morning hours.

Prices held in a range between $3.163 and $3.206 a pound. Futures were likely to find support at $3.125, the low from September 3 and resistance at $3.208 a pound, the high from August 28.

Official trade data released Monday showed that China's copper arrivals fell 12% from a year earlier in August, due to the fallout from a government investigation into metal financing at Chinese ports.

The Asian nation imported 340,000 metric tons of copper last month, unchanged from July.

The country's trade surplus widened to a record high of $49.8 billion in August from $47.3 billion in July, compared to estimates for a surplus of $40.0 billion.

Chinese exports climbed 9.4% from a year earlier, beating expectations for an 8% increase, however imports declined 2.4% last month, disappointing forecasts for a 1.7% gain.

A slowdown in domestic demand indicated a recovery in the broader economy remains fragile and may need further government stimulus.

China is the world's largest copper consumer, accounting for nearly 40% of global demand.

Meanwhile, in the U.S., data released Friday revealed that the economy added 142,000 jobs in August, the lowest amount in eight months and less than the expected increase of 225,000.

The report also showed that the U.S. unemployment rate ticked down to 6.1% last month from 6.2%, but that was mostly due to more people dropping out of the labor force.

The weaker-than-expected jobs report was taken as a sign that the Federal Reserve will not begin raising interest rates anytime soon.

A broadly stronger U.S. dollar also weighed, as the greenback rallied by the most in eight months against the pound to hit a 10-month high after a poll showed the "yes" to Scottish independence campaign on 51% against 49% for the "no" camp.

A stronger U.S. dollar usually weighs on copper, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.

Elsewhere on the Comex, gold for December delivery tacked on 0.21%, or $2.60, to trade at $1,269.90 a troy ounce, while silver for December delivery picked up 0.74%, or 14.2 cents, to trade at $19.29 an ounce.

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