METALS-London copper slips from 3-month high; markets expect quick rebound

METALS-London copper slips from 3-month high; markets expect quick rebound

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SINGAPORE, June 8 (Reuters) – London copper prices dropped on Monday after data showed exports from top consumer China had weakened last month, though markets expect prices of the red metal to rebound amid stimulus measures and prospects of a swift global economic recovery.

Three-month copper on the London Metal Exchange (LME) was down 0.3% at $5,671 a tonne, as of 0705 GMT, retreating from a three-month high hit in the previous session as an increase in U.S. employment fuelled hopes of an economic recovery.

“Copper just had its best weekly gain since September 2018. The first pullback from the high will probably be minor and the strong momentum may drive price further up,” said copper analyst Yu Xiao Jiang of Anglo American.

However, Yu said LME copper will face strong resistance at the $5,700 and $5,850 price levels.

Meanwhile, China’s exports contracted in May, as global coronavirus shutdowns continued to choke demand. Weak exports highlighted the pressure on China’s manufacturing industry, one of the major consumers of copper.

“Exports only accounts for about 20-30% copper demand in China, so I think the impact will be limited. But if it lasts longer, it will probably suppress copper price,” said Yu.

The most-traded July copper contract on the Shanghai Futures Exchange (ShFE) rose 1.8% to 45,800 yuan ($6,470.75) a tonne.

FUNDAMENTALS

* CHINA COPPER: China’s unwrought copper imports in May fell 5.5% from the previous month but was up 20.8% from the same period a year earlier, customs data showed.

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* OTHER PRICES: LME zinc dropped 1.9% to $2,013 a tonne while aluminium rose 0.3% to $1,596.50 a tonne. ShFE zinc fell 0.6% to 16,505 yuan a tonne, while aluminium hit its 15-week high at 13,430 yuan a tonne.

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