London copper slips

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SINGAPORE- 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 0.8 percent at $5,646 a ton, retreating from a three-month high hit in the previous session as an increase in US 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.

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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 percent 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 1.5 percent to 45,690 yuan ($6,448.93) a ton.

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