Copper down on China data, stronger dollar

Copper fell yesterday after Chinese trade data showed a surprising fall in copper imports last month, but expectations that June inflows could pick up limited losses. Three-month copper on the London Metal Exchange was $9,015 (Dh33,085) a tonne in official rings, after closing at $9,055 on Thursday. A stronger dollar against the euro also kept pressure on copper. Metals are priced in dollars and therefore sensitive to currency movements. China's imports of unwrought copper and semi-finished copper products dropped 3 per cent in May, after falling 13.7 per cent in April, because of high inventories. Analysts and traders had expected a slight rise. But analysts say demand in China, the biggest consumer of copper, remains strong and that consumers will start buying again this month as inventories are run down. "It may be that the May data is a little bit too soon to see the full impact of destocking," Natixis analyst Nic Brown said. "But if we get a weak number in June as well, I would find that worrying. The question is whether what we are seeing now are the repercussions of tightening measures in China." Copper stocks in bonded warehouses in Shanghai are estimated to have fallen by 50 per cent or more from above 600,000 tonnes earlier this year as merchants sold the material into China's backwardated market to take advantage of strong prompt prices.