Copper markets were steady on Monday as investors weighed easing demand from Chinese importers against the risk of supply disruption as labour unrest foments in major producing countries.
The most-active September copper contract on the Shanghai Futures Exchange was down 20 yuan at 64,240 yuan ($8,424). Copper for delivery in three months on the London Metal Exchange was $15 higher at $7,450.
"The release of Chinese import figures confirmed many analysts' expectations and held no real surprises, while copper remains on hold waiting for news on the various potential sources of industrial action," Standard Bank, London, said in a daily report. Workers at two mines and a smelter in Peru owned by Southern Copper Corp.
Launched a strike on Saturday to demand higher wages amid rising global commodity prices. In Chile, workers at Collahuasi, one of the world's largest copper mines, have set a strike vote for June 27.
Elsewhere in the country, sub-contractors at state-owned miner Codelco will meet with the company to discuss demands for better working conditions. The union is threatening a strike vote if a deal cannot be reached. Strata Plc's Canadian copper refinery (CCR) is running at less than 30 percent of 370,000-tonne-per-year capacity following a pay strike, and could be weeks away from hitting its target of 35 percent.
Chinese customs data showed refined copper imports in May were 116,749 tonnes, up nearly 150 percent year-on-year, but 37 percent down from April. Imports in the first five months of the year were 786,441 tonnes. China's net refined copper imports in the first five months of the year are already 30 percent higher than net imports for the whole of 2006.
Low stocks of metal in warehouses have amplified the risk to the market from supply losses. Combined Shanghai, LME and Comex stocks are under 236,000 tonnes, just over four days of global consumption.
LME inventories fell 1,775 tonnes to 117,825 tonnes on Friday and are down about 100,000 tonnes since February. On Thursday, stocks jumped by 5,400 tonnes and some physical dealers said more metal could find its way into warehouses as Chinese merchants diverted material, originally bound for Shanghai, to LME warehouses elsewhere in Asia.
Shanghai stocks fell 3,748 tonnes in weekly data on Friday. Stocks in Shanghai warehouses are up almost fourfold since a low in February as domestic consumers struggle to deal with record imports from this year, but in recent weeks inventories have stabilised just short of 100,000 tonnes.
LME lead was up $10 at $2,550, just $10 short of Friday's record high. "There are no lack of fundamental factors to cite but there can also be little doubt that lead has become the new darling of metals investors and has thus benefited from outsize money flows," economist Stephen Briggs at Society General said. "Lead is starting to feel a bit like nickel this year, so we may need to ask whether it might at some point see a similar slump."
Analysts said no resumption of lead shipments was likely in the near term from the Magellan mine in Western Australian, which produces 3 percent of the world's lead concentrate.