The price of copper is up 1% today, as traders buy back into the red metal after the recent sell-off seen in the last few trading sessions.
Copper dropped to a one-week low yesterday as dealers anticipated weak global demand, while today investors who felt the sell-off was overdone bought back the commodity.
In the past few years a large portion of the demand for copper has been coming from China, due to its vast manufacturing industry requiring such raw materials. Yesterday China reported a manufacturing purchasing manager’s index (PMI) level of 50.6 for April, when economists were expecting a reading of 50.8. This put pressure on the metal as investors already held concerns that China’s economy is cooling off. If China continues to report weaker-than-expected manufacturing figures, we might see copper fall.
The European Central Bank has cut interest rates by 0.25% to 0.5%, an all-time low for the eurozone. The move was widely expected by economists, and this could increase economic activity in the region. If the eurozone does manage to pull itself out of recession we could see a stronger construction and manufacturing sector, which might push copper higher.