LME copper slides after decline in Chinese imports

LONDON — Copper steadied on Tuesday but came under pressure from falling imports by top consumer China and climbing inventories raised worries about demand while a stronger dollar also weighed.

Benchmark copper on the London Metal Exchange (LME) was little changed at $9,420 a ton at 1601 GMT. Prices of the metal used in power and construction have traded in a narrow range for a few weeks.

“China’s trade overall looked good, but its copper imports are a negative,” one copper trader said.

IMPORTS: China’s copper imports fell for a third straight month in June, customs data showed on Tuesday, as high prices and slowing manufacturing growth weighed on demand in the world’s top consumer of the metal.

TRADE: China’s exports grew much faster than expected in June as solid global demand thanks to vaccination programs worldwide and reduced lockdown measures eclipsed coronavirus outbreaks and port delays while imports also beat expectations.

INFLATION: US consumer prices rose by the most in 13 years in June amid supply constraints and a continued rebound in the cost of travel-related services from pandemic-depressed levels as the economic recovery gathers momentum.

The data has raised expectations that the US Federal Reserve could tighen monetary policy sooner rather than later, which boosted the dollar.

A higher US currency makes dollar-priced commodities more expensive for holders of other currencies, weighing on demand.

INVENTORIES: Stocks of copper in LMEregistered warehouses have risen 40% over the past three weeks to 220,575 tons. On warrant stocks — material available to the market — are at their highest since May last year at 203,575 tons.

OTHER METALS: Aluminum was up 2.1% at $2,542 a ton, zinc slipped 0.4% to $2,939, lead was down 0.9% at $2,312, tin rose 0.8% to $32,350, and nickel was up 0.5% at $18,780.