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MTECHTIPS:-Copper slumps to 6-year low as China PMI weakens demand outlook

MTECHTIPS:-Copper slumps to 6-year low as China PMI weakens demand outlook

Copper prices fell to the lowest level in more than six years on Monday, after a pair of reports on China’s manufacturing sector fueled concerns over a deepening slowdown in the world’s second largest economy. Copper for September delivery on the Comex division of the New York Mercantile Exchange tumbled to a session low of $2.339 a pound, a level not seen since June 2009, before trading at $2.342 during European morning hours, down 2.2 cents, or 0.95%. On Friday, copper declined 1.3 cents, or 0.57%, to end at $2.363. Futures dropped 2.0 cents, or 0.76%, last week, the fifth straight weekly loss. A pair of disappointing manufacturing reports underlined concerns over the health of China’s manufacturing sector. The Caixin/Markit manufacturing purchasing managers’ index for July released on Monday fell to 47.8 from a preliminary reading of 48.2. It was the lowest reading since July 2013. Meanwhile, the official China’s manufacturing purchasing managers’ index published on Saturday dipped to 50.0 last month from 50.2 in June, as new orders declined. Copper traders view Chinese factory activity as an indicator of the nation’s copper demand, as the red metal is widely used by the sector. Prices of the red metal sank 25.1 cents, or 9.6%, in July, as steep declines on China’s stock market rattled investors’ confidence. The Shanghai Composite took investors on another volatile ride on Monday, with shares plunging nearly 2%. The index lost almost 15% in July despite the introduction of government-measures aimed at supporting the market. Market players are concerned that the plunge in the stock market could spread to other parts of the Chinese economy, triggering fears that the Asian nation’s demand for the industrial metal will decline.
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