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Copper Price Latest: Weak Chinese Trade Data Trims Copper’s Recent Rally

Copper Price Latest: Weak Chinese Trade Data Trims Copper’s Recent Rally

Nick Cawley, Senior Strategist

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Copper Price Analysis and Chart

  • Chinese exports miss forecasts by a wide margin.
  • Copper is now testing technical resistance.
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The latest Chinese trade data showed the world’s 2nd largest economy is struggling and that could spell problems for growth-related commodities including copper. Chinese exports in May contracted by 7.5% after recording 8.5% growth in April, the sharpest decline in four months. Imports also fell but beat forecasts and last month’s reading.

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Alongside today’s data, a subsidiary of China’s central bank has told major state-owned banks to lower their dollar deposit rates in an effort to boost the value of the Yuan, according to an exclusive story by Reuters. While lower dollar rates may help to boost the beleaguered Chinese currency, they may also nudge Chinese companies to invest domestically and help boost the economy. According to the latest OECD report, the Chinese economy is expected to expand by 5.4% this year before slowing slightly to 5.1% in 2024.

The lifting of domestic covid-19 restrictions helped boost the Chinese economy and with it demand for copper, among other commodities. The price of copper had been pushing higher at the end of last year, in anticipation of the move and the lowering of Chinese deposit rates, before the metal jumped in early January as China re-opened its borders. Since then, the so-called precious metal has slipped lower, culminating in copper printing a multi-month double-low print in mid-May. Copper futures are now approaching an old area of support turned resistance - $3.8165 - and the longer-dated 200-day simple moving average (black line) and this level may be difficult to overcome in the short term.

Copper Price Daily Chart – June 7, 2023

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Chart via TradingView

What is your view on Copper – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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