Shanghai copper eased 1 percent on Monday, after a holiday break when London metal fell by more than 1.5 percent, but analysts forecast higher prices because of falling spot supplies in China, the world's top consumer. The July copper contract, the most active on the Shanghai Futures Exchange, fell 710 yuan, or 1.1 percent, to 64,670 yuan.
The London Metal Exchange is closed on Monday for a public holiday, after sliding 1.6 percent in the previous two trading days when Shanghai suspended trading for national holidays. Analysts said they forecast prices to extend gains in China, given indications that domestic merchants have started to move stocks out of exchange warehouses to meet physical demand.
"Prices are likely to tick up in the month, as we can see Shanghai inventories are falling after imports were impacted in April due to lower local prices in the physical market," said analyst Cai Luoyi at China International Futures.
Copper stockpiles monitored by the Shanghai exchange fell 2,944 tonnes in last week ended on Tuesday, after a decline of 6,765 tonnes in the previous week. In industry news, Chile's Codelco said on Sunday it had again suspended work at the world's largest underground copper mine, citing renewed violence by striking subcontract workers who began their labour protest 19 days ago.
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