SHANGHAI (Commodity Online): China's lukewarm response to copper imports has hit the commodity's prices in the London market.
This week copper traded a bit low in London as China reported a drop in copper imports for the third straight month in June, leading to caution on the demand outlook by the key buyer of the metal.
China's trade surplus in June jumped on surprising strength in exports, but copper imports fell by 17.3 per cent to 328,231 tonnes.
The arbitrage wasn't favourable to (copper) imports most of the time, and there were high stockpiles in China, said an analyst.
But there are still many uncertainties in the economic picture. India's May industrial output grew at a slower-than-expected 11.5 per cent from a year earlier, signalling caution on the economic outlook.
Three-month copper on the London Metal Exchange fell $89 to $6,680, after hitting a near two-week high of $6,775 this week.
The market is focused on China's economy. Investors believe that the government may loosen its grip in the second half, which will be bullish for metals.
Beijing is scheduled to release a slew of economic data for June later this week, including economic growth, inflation and industrial output, expected to shed light on the health of the world's third-largest economy. LME copper's cash-to-three-month spread reduced to just below $19, its narrowest since mid-February, caused by tightness in the spot market, according to traders.
LME's copper stocks fell 2,100 tonnes to 436,900 tonnes last week, their lowest since late November last year, but up nearly 70 per cent from a year earlier. The ratio of cancelled warrants -- materials earmarked for delivery -- started to rise in early June and peaked at nearly 8 per cent last week.