Copper prices have been in decline for the third consecutive day as data out of Chinese left no chance for the metal. Copper is currently trading at $9,611 and could easily drop to $9,590. If the $9,570/$9,580 support line is breached, the bears could make a push down to $9,550.
First of all, China released lackluster business activity data: the manufacturing PMI in July fell to 50.4 from 50.9 earlier, while the PMI for the non-manufacturing sector dipped to 53.3 from 53.5. As long as these indicators hold above the psychologically important 50 mark, which separates expansion from contraction, there are no significant risks, but the trend does raise some red flags.
Other macro data came out later. The Markit/Caixin Manufacturing PMI fell to 50.3 in July from 51.3 in the previ0us month. China is a major global importer of copper, so any deterioration in production data could signal a reduction in demand for raw materials. It is this risk that is now taking a toll on copper prices.