To curb inflation and cool off its red-hot economy, China is expected to increase the requirement on bank reserves, which it has done three times thus far this year.
"Higher prices hinge on China's demand, which is unclear at the moment," Yang Zhenqiang, an analyst at First Futures, told the news service. "We do see physical buyers emerge every time there's a decline, so that's keeping the market supported."
Shortly prior to 2:15 p.m. on Thursday, copper futures were down 0.23 percent, a 0.01 cent reduction o $4.3045 per pound.
"The global copper market will show a small deficit this year, even if Chinese demand does not grow at all," according to a Wednesday report by Bank of America Merrill Lynch strategist Michael Widmer. "Reduced copper offtake from China will, however, have a knock-on impact on 2012: if the country's demand increases by less than 2.5 percent in 2011, there is scope for an oversupplied market next year."
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.