Copper struggles near 6-week low after China imports decline

Investing.com - Copper prices struggled near the lowest level in six weeks on Monday, after data showed that China's imports of the red metal slowed in May.

On the Comex division of the New York Mercantile Exchange, copper for July delivery dipped 0.3 cents, or 0.1%, to trade at $2.689 a pound during European morning hours. Prices held in a range between $2.692 and $2.704.

On Friday, copper slumped to $2.670, a level not seen since April 23, before inching up 0.5 cents, or 0.2%, to settle at $2.692.

Futures were likely to find support at $2.670, the low from June 5, and resistance at $2.731, the high from June 4.

Official trade data released Monday showed that China’s copper arrivals in May fell 16.3% from a month earlier to 360,000 metric tons.

The country’s trade surplus widened to $59.5 billion last month from $34.2 billion in April, compared to estimates for a surplus of $45.0 billion.

Chinese exports fell 2.5% from a year earlier, while imports tumbled 17.6%, worse than forecasts for a decline of 10.7%.

A slowdown in domestic demand indicated a recovery in the broader economy remains fragile and may need further government stimulus.

China is the world's largest copper consumer, accounting for nearly 40% of global demand.

Elsewhere, gold futures for August delivery tacked on $4.40, or 0.38%, to trade at $1,172.50 a troy ounce, while silver futures for July delivery rose 8.8 cents, or 0.55% to trade at $16.07 an ounce.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 96.28, not far from Friday’s highs of 96.95.

The greenback remained supported after an above forecast U.S. jobs report bolstered expectations for a rate hike from the Federal Reserve later this year.

The Labor Department reported that the U.S. economy added 280,000 jobs in May, well ahead of economists forecast for 220,000.

The upbeat data underlined the view that the economy is on track to rebound after a weak first quarter and bolstered expectations that the Fed could start to hike interest rates at its September policy meeting.

Meanwhile, developments surrounding talks between Greece and its international creditors remained in focus.

Over the weekend European Commission President Jean-Claude Juncker urged Greek Prime Minister Alexis Tsipras to come up with alternative economic reforms "swiftly" so that negotiations could continue this week.

Athens delayed a key debt payment to the International Monetary Fund on Friday after Tsipras rejected the proposed reforms put forward by the EC as “absurd”.