* China’s July exports undershoot forecasts by big margin
* China’s July copper imports rose 5.9 pct on mth
* Coming up: U.S. Federal budget for July; 1800 GMT
(Updates to add closing prices)
By Eric Onstad and Harpreet Bhal
LONDON, Aug 10 (Reuters) – Copper prices slipped on Friday
for a third session after weak Chinese trade numbers marked
another day of gloomy data and reinforced concerns about the
outlook for demand from the world’s top metals consumer.
Investors focused on the deteriorating economic outlook
rather than a surprising rise in copper imports in July.
Three-month copper on the London Metal Exchange
ended at $7,490 a tonne, down from Thursday’s close of $7,534,
and was on track for just a 0.5 percent gain for the week after
a modest rally on Monday and Tuesday ran out of steam.
“It looks like China’s heading for a slightly harder landing
maybe. That seems to be how the market’s interpreting it, not
looking just at the metal-specific trade data but the wider
trade picture,” analyst David Wilson at Citigroup said.
China’s imports of commodities such as iron ore and copper
held up better than expected in July, but weak trade figures and
a nine-month low in crude oil imports painted a picture of a
slowing economy.
The data followed figures on Thursday showing factory output
growth slowed unexpectedly in July to the weakest level in more
than three years.
“In our view, weaker-than-expected recovery in China could
sustain headwind in the (base metals) complex in the second half
this year,” Deutsche Bank analysts said.
“We expect that the rate of copper restocking in China will
continue to drop and the country could move into a destocking
cycle in the coming months.”
China is the world’s biggest copper consumer, representing
around 40 percent of global copper demand.
Investors previously pushed up prices on the back of soft
economic data, reckoning the numbers would spur officials to
launch fresh stimulus measures, but many seemed to be losing
hope for quick injections of liquidity.
“I think we’re in a no-man’s land with that at the moment
… The market’s wondering whether we’re going to get more
cutting, or do we have wait to see if the policy measures in
China that already been introduced actually have an impact,”
Wilson said.
Still, some investors hoped for measures by central banks in
major economies to help spur growth and metals demand, keeping
an eye on the euro zone after comments by a top official of the
European Central Bank signalled the bank might soon intervene in
bond markets to help debt-laden Spain and Italy.
TRADE DATA
The Chinese trade data showed that copper imports rose 5.9
percent in July from June, but analysts were not impressed,
attributing this mainly to term contracts and financing deals
rather than a pick-up in consumer demand.
“We understand that consumer demand is still sluggish,” said
CIFCO futures analyst Zhou Jie, pointing to a fall in futures
prices as evidence of market nonchalance to the
higher-than-expected copper imports.
LME aluminium ended at $1,881 from Thursday’s close
of $1,900, and lead ended at $1,892 from $1,921 – in the
middle of the $1,850-$1,950 range it has held to since early
July.
Tin closed at $17,875 from $17,900 and nickel
ended at $15,400 from Thursday’s close of $15,500 –
getting closer to last week’s three-year low of $15,236.
LME zinc ended at $1,835 from Thursday’s close of
$1,860. Zinc prices have been pressured by high Chinese
inventories and low global demand from an ailing galvanised
steel industry.
Metal Prices at 1604 GMT
Comex copper in cents/lb, LME prices in $/T and SHFE prices in yuan/T
Metal Last Change Pct Move End 2011 Ytd Pct
move
COMEX Cu 339.60 -2.90 -0.85 344.75 -1.49
LME Alum 1881.00 -19.00 -1.00 2020.00 -6.88
LME Cu 7494.00 -40.00 -0.53 7600.00 -1.39
LME Lead 1892.00 -29.00 -1.51 2034.00 -6.98
LME Nickel 15375.00 -125.00 -0.81 18650.00 -17.56
LME Tin 17825.00 -75.00 -0.42 19200.00 -7.16
LME Zinc 1839.25 -20.75 -1.12 1845.00 -0.31
SHFE Alu 15430.00 -60.00 -0.39 15845.00 -2.62
SHFE Cu* 54730.00 -540.00 -0.98 55360.00 -1.14
SHFE Zin 14635.00 -120.00 -0.81 14795.00 -1.08
** Benchmark month for COMEX copper
(Additional reporting by Carrie Ho in Shanghai; Editing by
Alison Birrane and Keiron Henderson)
