copper falls on fears of declining chinese imp

Copper falls on fears of declining Chinese imports in second half of year
07.11.07, 6:37 AM ET

LONDON (Thomson Financial) - Copper fell on fears that China is set to import less of the red metal in the second half of the year.

Preliminary trade data released yesterday showed that Chinese copper imports (including products) declined by 3.7 pct in June from May, following massive inflows into the world's largest consumer in the first quarter.

China had imported 50 pct more of the red metal in the first six months of 2007, than in the same period last year, building up large stockpiles.

Copper prices have declined after rallying above 8,000 usd a tonne because of ongoing industrial unrest in the Americas.

'I expect Chinese imports will be around the level of last month in the third and fourth quarters, they won't be at the levels they were in the first few months of the year,' said Jon Bergtheil, an analyst at JP Morgan.

'(The copper price) has come up against a big technical level of 8,000 usd. People are sitting waiting to see if there's enough steam in the strikes to take us through.'

At 10.35 am, LME copper for three-month delivery was down slightly to 7,874 usd a tonne from 7,915 usd at the close yesterday.

Copper prices are also underpinned by falling inventories, as stocks in LME certified warehouses dropped below 100,000 tonnes, after registering a decline for the twelfth straight day. Stockpiles fell 1,025 tonnes, to 99,350 tonnes in today's data.

Declines in other base metals, especially nickel, have also weighed on copper prices.

The grey metal has lost almost a third of its value since hitting a record high of nearly 52,000 usd in May. Prices have been hit hard by stainless steel producers, one of nickel's key consumers, switching to alternatives because of the high costs.

Nickel recovered slightly this morning to 33,200 usd against 32,645 usd, having lost a hefty 5.1 pct yesterday.

In other metals, lead hit another all time high of 3,000 usd from 2,930 usd at the close yesterday.

Aluminium was down at 2,797 usd from 2,808 usd, and zinc fell to 3,400 usd from 3,405 usd. Tin edged higher at 14,175 against 14,150 usd.




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