SHANGHAI, June 2 (SMM) -- According to official data, China's PMI was 53.9% in May, down from April levels. Despite of relieving inflationary pressure, the data raised market concerns over the economic growth in the world's biggest metal consumer. Asian stocks markets weakened in response.
Meanwhile, the euro continued to tumble, setting new 4-year lows against the US dollar on Tuesday, as worries that debt issues in Europe could lead a new round of substantial write-downs for the banking sector in the coming 18 months, adding to concerns about the region's economic outlook. The single currency hit 1.2109, and closed at 1.2249.
Gold and the US dollar closed higher following increased risk aversion, weighing down LME copper prices to USD 6,678/mt, below the 10-day moving average. Later, the US better-than-expected data concerning manufacturing and construction spending helped US equities markets pare losses, and LME copper prices rebounded to USD 6,793/mt as a result.
In early Asian trading hours, LME copper prices felt pressure at the 10-day moving average, moving around USD 6,750/mt. LME copper inventories continued to fall, down 1,150 mt to 475,575 mt on Tuesday. But, negative impact from macro news and depressed market confidence overshadowed positive impact from falling stocks.
SHFE copper prices are expected to test support at RMB 54,000/mt on Wednesday.
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