Strong demand for copper and Purchasing Managers' Index data recent release for major countries across the world have boosted hopes that the global economic growth has resumed. China remains world's biggest copper consumer as it continues its massive infrastructure build-up. The health of its economy, therefore, remains an important factor in the outlook for copper. China's manufacturing PMI in March showed expansion rising to 50.5, above February's reading of 49.2. Then, there was the U.S. ISM manufacturing PMI that came in at 55.3 which was better than February's reading of 54.2. All signs of a manufacturing sector that is expanding in the world's two biggest economies. Amidst all positivity, the recent bearishness is marginally governed by the fall inventories across the globe. LME inventories of copper reached the highest level since 2013 in March 2018 at over 388,000 MT. Since then, stocks have dropped dramatically. Inventories on the world's leading copper exchange have declined steadily since early 2018 and are currently around lows of 130,000 MT. The silver lining in the status of low level of inventory is that more buying spurt is expected sooner or later to replenish stock levels which would keep market buoyant. Support is also likely to come from expected truce between US and China's trade dispute. Recently, US President Donald Trump said US and China were close to a trade deal during a meeting with Chinese Vice-Premier Liu He. Though some details need to be worked out before a final agreement is reached, including the US' reluctance to remove $250 bn in tariffs on Chinese goods.
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