Copper exhibits a five-day downward trend as economic worries supplant China's production decline

Copper price is on the bears' radar as it falls for the fifth straight day and remains under pressure near the one-month low heading into the European session on Thursday. The latest weakening in the red metal may be attributable to negative data from the world's leading producers as well as coronavirus in the world's largest metal consumer, China. In doing so, the quotation disregards a decline in output at one of the commodity's primary producers, Chile.

Copper futures on the COMEX declined more than 1.0% to $3.4790 at the time of publication, while depicting the movements. Reuters reported that as of 02:13 GMT, a three-month copper contract on the London Metal Exchange (LME) was down 0.8% to $7,742.50 a tonne, extending losses from the previous session. The metal contract for October on the Shanghai Futures Exchange falls about 1.6%.

However, China's Caixin Manufacturing PMI had the lowest readings in three months, indicating a contraction in activity, with a figure of 49.5, compared to 50.2 expected and 50.4 previously. In doing so, the private manufacturing indicator mirrors the official NBS PMI and reveals the bleak conditions at the largest industrial actor on the planet. On the same line, the US ADP Employment Change increased by 132K, compared to 288K anticipated and 270K previously.

Recent market sentiment appears to be weighed down by rumors of another ship obstructing the Suez Canal prior to the recent refloat, pessimism over China's covid conditions, and disputes with the United States over Taiwan. Recently, Taiwan's president, Tsai Ing-Wen, stated Taiwan's desire to strengthen its chip sector partnership with the United States.

Elsewhere, hawkish Fed wagers add to the industrial metal's load. According to the CME's FedWatch Tool, the probability of a September rate hike of 75 basis points has increased to 74.0% from 73.0% yesterday.

Alternately, forthcoming details of China's stimulus and an 8.6% YoY decline in the output of the world's largest copper producer, Chile, during the month of July appear to challenge copper bears.

While market anxieties and expectations of a decline in demand and a stronger US dollar are bearish for metal prices, headlines around the ISM Manufacturing PMI for August, which is predicted to be 52.8 versus 52.0 before, could delight traders ahead of Friday's US Nonfarm Payrolls report (NFP).