Copper struggles to defend $4.00 as China probes buyers

• Copper prices dribble around daily lows amid mixed clues from China.
• PBOC inaction, plans to overcome lockdowns and more easing keep buyers hopeful.
• Cautious optimism, downbeat data for April join inflation and growth fears to weigh on prices.

Copper prices fail to recover from an eight-month low, flashed last week, as mixed concerns over global economic growth joins China’s downbeat data and fears over covid headlines.

That said, the red prices remain pressured at around $4.15, down 0.30% intraday, on COMEX whereas the most active three-month contract on the London Metal Exchange (LME) prints 0.40% intraday gains around $9,200 at the latest. Further, copper prices on the Shanghai Futures Exchange rise 0.90% to 71,220 yuan ($10,486.95) a tonne by the midday break, per Reuters.

That said, risk-off returns to the table, fading Friday’s recovery moves, after China reported downbeat figures for April month’s Retail Sales and Industrial Production, backed by conveying fresh fears over the coronavirus resurgence. “Shanghai set out plans on Monday for the return of more normal life from June 1 and the end of a painful COVID-19 lockdown that has lasted more than six weeks and contributed to a sharp slowdown in China's economic activity,” said Reuters.

On a different page, fears that Germany isn’t going to respect Hungary’s push for no total ban on Russia’s energy imports weigh on market sentiment and the red metal’s prices. Furthermore, news that the military actions in Donbas continue to accelerate underpins the risk-off mood, as well as favor the copper bears.

Amid these plays, the S&P 500 Futures drop 0.50% even after the Wall Street benchmarks rallied the previous day. Further, the US 10-year Treasury yields struggle to extend Friday’s recovery moves as the bond coupon declines 2.5 basis points (bps) to around 2.90% by the press time.

Looking forward, headlines from China and inflation woes will be crucial for copper prices, which in turn highlight this week’s US Retail Sales and Eurozone economic forecasts, not to forget covid updates, for fresh impulse.