Copper Records Worst Drop in 19-Months

Sentiment has been bearish since the start of the week after Chinese manufacturing data came in below expectations, reigniting fears of a demand slowdown from the globe’s biggest source of demand. Last session’s selloff was triggered by a large build-up in the London Metal Exchange’s (LME) copper inventories. Stocks available for delivery at LME-registered warehouses soared by 32.00% or 38,950 tonnes, to 160,200 tonnes, the highest since mid-April.

Copper futures for May delivery are currently hovering around $2.530 per pound. Technical analysts reckon that the presence of a strong support zone around $2.500 could see prices rebounding intraday. The short-term trend remains overtly bearish, with any dip below the support region likely to push prices all the way to $2.450 per pound.

After a strong report in February, Australia’s trade surplus contracted more than forecast in March, as growth in imports outpaced export activity. Accounting for seasonal adjustments, the Australian Bureau of Statistics reported a surplus of AUD$3.11 billion. The figure came in below analysts' expectations of a surplus of around AUD$3.25 billion, however, February’s trade balance was revised higher to a surplus of AUD$3.66 billion. While the value of exports edged 2.00% higher in March to $33.3 billion, imports surged 5.00% to $30.2 billion.

Australia had been posting record trade surpluses in recent months, helped by a jump in export volumes from new mines and higher iron ore prices. Nevertheless, the latest weakness in data suggests the surplus is past its peak. AUDUSD is dipping in early Thursday trade, with the pair last seen around 0.7415.