LONDON: Copper prices eased on Monday as investors took fright from weaker than expected trade data from top consumer China showing lacklustre demand.
China’s copper imports fell 8% in May from the previous month as record-high prices further eroded buying interest while overall export growth missed analysts’ forecasts.
“When we get data like this from China, it highlights the potential risk that their rapid pace of growth is starting to slow,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“It’s a market that has lost momentum and traders are responding to that and reducing their exposure. I’m not saying the rally is over, but the market is potentially in need of a period of consolidation, which could take it even lower.”
Three-month copper on the London Metal Exchange had shed 0.3% to $9,925 a tonne by 1600 GMT after rising by 1.7% on Friday.
LME copper has gained 27% so far this year, having retreated from a record high of $10,747.50 touched last month, driven partly by optimism that a green revolution would spur more demand for copper from new uses, including electric vehicles.
Hansen said if prices extended their retreat, they would likely head towards the 50-day moving average around $9,655.
The net long position in copper on the US Comex exchange has tumbled by 58% over the past four weeks to the lowest levels since June last year, he added.
The closely watched Yangshan copper premium, paid on top of London prices for delivery of physical copper into China, is at its lowest since 2016 at $28 a tonne.
LME lead was the only metal in positive territory, advancing 1.2% to $2,161.50 a tonne after on-warrant LME inventories fell 16% to a three-month low of 65,050 tonnes, daily LME data showed.
LME aluminium dropped 1% to $2,430 a tonne, nickel fell 0.7% to $17,895, zinc lost 0.1% to $3,008.50 and tin slipped 1.2% to $30,505.