Commodity prices may have had a good run last week, but that improved tone may not last with news that China’s imports of some key commodities fell sharply in June.
Copper and iron ore shipments were down noticeably in the monthly trade figures released over the weekend (see first story).
Oil imports rose strongly because of the solid level of growth in the economy with energy needs soaring.
But a 9.1% drop in iron ore imports from May and a 17% fall in imports of unwrought copper surprised traders analysing the figures over the weekend.
Coming after copper prices staged a solid 4.7% rebound last week, the news will cause quite a few traders to rethink their outlook for both Chinese demand and world prices.
Copper prices rose, capping a weekly gain, on increasing hope that global growth and metals demand will rise.
That was after the 17% fall in the June quarter.
London Metal Exchange stocks fell again last week, for a 20th consecutive week, which traders took to mean consumption was going well.
But the news of the sharp fall in Chinese imports will have them scratching their heads as they had assumed a similar fall in stocks in Shanghai was a sign of rising imports.
September Comex copper futures rose 3.8 USc, or 1.3%, to $US3.0535 a pound on Friday.
LME copper inventories fell 2.3% last week to 436,900 tonnes, the lowest level since late November. LME stocks are down 13% so far this year.
Stocks in the Shanghai Futures Exchange dropped 5.7% last week, the ninth decline in the past 10 weeks.
On the LME, three month copper ended the week up $US145 (or 2.2%) to $US6,760 a tonne ($US3.07 a pound).
Oil prices rose to more than $US76 a barrel on Friday as the fears about risk abated.
Nymex crude futures ended up 65USc at $US76.09 a barrel for the August contract in New York, for a rise of 5.5% for the week.
Prices jumped as much as $US1 to $US76.48 a barrel, as prices moved up and down in a volatile day’s trading.
The late firmness in the US dollar clipped gains.
Inflation and other figures this week will impact prices as they could confirm the emergence of a deflationary trend in US prices.
US crude prices are still well under the $US87 a barrel reached in early May. That was a 19 month high.
Gold prices rose 1.5% Friday to end above rose $US1,210 an ounce in New York.
Spot gold reached $US1,213.35 an ounce, and ended at $US1,211.21 an ounce.
August futures rose $US13.10 to $US1,209.10.
The metal has recovered after falling to its lowest since late May on Wednesday at just above $US1,185 an ounce.
Silver prices firmed slightly in line with gold, at $US18.14 an ounce against $US17.89 Thursday.
