Copper futures traded at $3.85, down 0.60%, on the back of global growth worries, with recent data out of both the US and Chinese coming in worse-than-expected.
The US consumer confidence index released yesterday fell to 70.2 from a previous revised figure of 71.6 (consensus: 70), while the Richmond Fed manufacturing index for March plunged to a reading of 7 from 20 (consensus: 18). The data raises serious questions over the health of the US economy, and unsurprisingly knocked copper prices lower. Also weighing on copper is an apparent slowdown in China's appetite for industrial metals. BHP Billiton last week warned of faltering Chinese demand for iron ore, a key steelmaking ingredient. China buys around 40% of the world’s copper output.
On the supply side, China currently holds more than one million tons of commercial stocks of refined copper cathode, a level last seen in 2009. The rise in stockpiles is due to high imports and weak domestic demand, which may slow arrivals in the second quarter.