US copper futures staged a mild recovery at the open on Tuesday, albeit in thin trading conditions, with better-than-expected Chinese April imports and tame US inflationary data failing to entice buying interest, traders said.
"We remain in this downtrend...all of the commodities are kind of soft today. Trading is very, very quiet and thin," said one. By 10:21 am EDT (1421 GMT), copper for July delivery was trading 0.80 cent higher to $3.5050 a lb on the New York Mercantile Exchange's COMEX division, dealing in an early session range between $3.4565 and $3.5365.
Spot May copper rose 0.30 cent to $3.4950. Trading volumes for copper futures were estimated at 4,100 lots by 9:00 am Stronger-than-expected Chinese April import statistics and relatively tame US inflationary data failed to bolster an early short-covering bounce, leaving the market mired in rangebound dealings.
"There seemed to be a knee-jerk reaction to the CPI data, with the stock market rallying on the news, which in turn, helped the copper," one said. US consumer prices advanced 0.4 percent in April on a continued rise in energy and food prices, but that was below expectations of a 0.5 percent gain. The data painted a somewhat stable inflation picture, a government report on Tuesday showed.
Meanwhile, China's imports of refined copper, anode and copper alloy in April reached 205,053 tonnes, down 6.5 percent from March's record of 219,359 tonnes but exceeded expectations. Despite the bullish statistics, traders cited caution due to an expected slowdown in Chinese consumption, which continued to be an overriding concern for the market.
"We deal with some Chinese traders here in the US and also with a lot of people who deal scrap to China, and a lot of them are holding back waiting for lower prices," said one futures commission merchant in New York.
"There is still a certain amount of tightness in the market, so it's a wait and see," he added. London Metal Exchange (LME) copper for delivery in three months last traded at $7,660 a tonne, up $5 from Monday's kerb close. Overnight inventory data showed LME copper stocks decline 1,175 tonnes to 141,300 tonnes on Tuesday, while COMEX stocks were unchanged at 31,529 short tons on Monday.
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