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MTECHTIPS:-Copper futures struggle amid weak China demand outlook

MTECHTIPS:-Copper futures struggle amid weak China demand outlook

Copper futures struggled for direction on Wednesday, as investors focused on the deteriorating outlook for China and its impact on the global economy. Copper for September delivery on the Comex division of the New York Mercantile Exchange tacked on 0.2 cents, or 0.09%, to trade at $2.303 a pound during morning hours in London. A day earlier, prices of the red metal lost 3.6 cents, or 1.54%. Tuesday’s losses came after a pair of reports on China’s manufacturing sector added to concerns over a deepening slowdown in the world’s second largest economy. The final Caixin/Markit manufacturing purchasing managers’ index for August came in at 47.3, the lowest reading since March 2009, while the official China’s manufacturing purchasing managers’ index inched down to 49.7, the weakest level since August 2012. 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. Copper prices sank to a six-year low of $2.202 on August 24 as concerns over the health of China’s economy and steep declines on Chinese stock markets dampened appetite for the red metal. The Shanghai Composite took investors on another volatile ride on Wednesday, tumbling by as much as 4.6% after the open, before paring losses after the midday break to end down 0.4%. The turmoil in markets began when China unexpectedly devalued the yuan on August 11, sparking fears that the economy may be slowing at a faster than expected rate. The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year. Elsewhere, gold futures for December delivery rose $1.20, or 0.11%, to trade at $1,141.00 a troy ounce, as market players looked ahead to the release of key U.S. data later in the session.

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