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London copper futures rose on Monday, shrugging off data showing an expected drop in imports by China, but a weak seasonal demand outlook at the top consumer kept the metal prices near their lowest since late April.
Three-month copper on the London Metal Exchange was up 0.4 per cent at $5,958.50 a tonne by 0410 GMT, not far above Friday’s trough of $5,885, its weakest since April 23.
The most-traded August copper contract on the Shanghai Futures Exchange rose 0.3 per cent to 43,160 yuan ($6,956.91) a tonne.
Copper imports
China’s import of copper fell 16.3 per cent from a month ago to 360,000 tonnes in May, data from the General Administration of Customs showed. Imports in the first four months of the year had slid 14.7 per cent from a year ago.
“The drop in imports was within market expectations. It was already priced in,’’ said Guo Hao, an analyst at Jinrui Futures in Shenzhen.
“Copper prices will remain in the downward trend due to lower imports, seasonally weak demand in June and a stronger dollar,’’ Guo said, adding that the possibility of further loosening of monetary policy in China would lend some support.
Fall in China’s exports
Data on Monday also showed China’s exports in May fell less than expected but a double-digit drop in imports will likely keep the pressure on Beijing for more stimulus to avert a sharper economic slowdown.
But in the near term, concerns over copper demand could keep the prices under pressure. The strongest quarter for demand in China, the world’s top copper consumer, is passing its peak, with factories eyeing a summer production slowdown.
Dollar vs yen
A firm dollar is also keeping a lid on the price of commodities priced in the greenback by making them more expensive for the holders of other currencies.
The dollar traded near 13-year high against the yen after strong US employment data bolstered expectations for an interest rate hike by the Federal Reserve before year-end.
Investor sentiment was bearish. Hedge funds and money managers all but eradicated a bullish bet in Comex copper during the week ended June 2, US Commodity Futures Trading Commission (CFTC) data had showed on Friday.
Non-commercial dealers slashed their net long stance in copper futures and options by 24,093 contracts to 4,221 contracts, according to the CFTC. The cut brought their net long to its lowest since mid-March.
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