While May copper prices have put together a recovery bounce off this week's lows, many traders feel that the rise in copper prices may be largely attributed to the strong rebound in US equities yesterday afternoon. US economic data this week may have been partially discouraging to the copper market, however, as lukewarm housing data and industrial production at a two month standstill may not encourage a favorable demand outlook for copper. On the other hand, a rise in Chinese equity markets overnight and rumors of possible monetary easing by the Chinese central bank easing may have provided additional support for copper. The copper market might have been discouraged by IMF analysis released overnight that suggests Chinese copper inventories are at normal levels, as many traders were hopeful that China was in a re-stocking mode. The copper market could potentially find support off news of falling production from Rio Tinto yesterday afternoon. and from favorable US demand forecasts from a major copper miner during the overnight session.
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