SHANGHAI: London copper was steady on Monday as data showing China's inflation cooled in June triggered hopes for policy easing by the top consumer of the metal, offsetting a bleak US jobs report that drove down prices in the prior session.
China's annual consumer inflation came in at 2.2 percent, from May's 3.0 percent, leaving room for Beijing to ease policy without stoking upward price pressures and helping most commodities recover from previous session's losses triggered by the dismal US jobs data.
Three-month copper on the London Metal Exchange edged up 0.1 per centto $7,538.75 per tonne by 0425 GMT, snapping three sessions of losses. Prices dropped more than 2 per centon Friday.
The most-active October copper contract on the Shanghai Futures Exchange fell 1.1 per centto 55,130 yuan ($8,700) per tonne, tracking the drop in LME prices in the previous session and heading for its third session of losses.
“Better-than-expected China inflation numbers supported sentiment, although technicals have a greater effect on prices lately as investors continue to trade within safe narrow ranges,” said CIFCO Futures analyst Zhou Jie.
“In the short term, I see LME copper bound between $7,350 and $7,600, and Shanghai copper between 54,500 yuan and 56,000 yuan,” Zhou said.
In the physical markets, analysts noted a slight uptick in Chinese copper demand, although overall demand remained sluggish. Investors are now awaiting China's commodities trade data due later this week for fresh trading cues.
Arrivals of copper may have fallen in June compared to the previous month, with term shipments in a seasonal decline.
In the euro zone, better-than-expected German industrial production numbers were encouraging, but officials cautioned against expectations of quick solutions to problems there, especially out of a meeting later in the session among the bloc's finance ministers.
The next set of macroeconomics data likely to affect metal prices will be China's GDP numbers, which are due later this week and likely to show its weakest expansion in three years.
In industry news, BHP Billiton will tighten global copper supply from late 2013 onward if it postpones work on its single-biggest project, the $30 billion expansion of the Olympic Dam mine in Australia.
