US copper futures edged lower in morning business on Friday, extending a week-long consolidation, as traders grappled with softer Chinese May import data and a slew of ongoing strike threats, analysts said.
"I think the Chinese data was expected. We have had huge surges of imports into China, and now we have had three of the last four releases from Shanghai showing somewhat higher inventories. It was a bit of negative sentiment, owing to the fact that London inventory numbers surged the other day, but I think people got over it pretty quickly," said Bart Melek, Global Commodity Strategist with BMO Nesbitt Burns in Toronto.
By 11:28 am EDT (1528 GMT) copper for September delivery was up 0.45 cent to $3.3980 a lb on the New York Mercantile Exchange's COMEX division, trading in an early band between $3.3875 and $3.4265. Soon-to-be spot July copper fell 1.10 cents to $3.3920, near the lower end of its early $3.3895-$3.4260 trading band.
By 10 am, estimated copper futures volumes amounted to 3,239 lots. China's net imports of refined copper in the first five months of this year have already exceeded net imports for all of 2006, customs data showed on Friday, fuelling expectations that shipments will slow considerably in the third quarter of the year.
Refined copper imports in May fell 37 percent from April to 116,749 tonnes, the lowest level since December, as record imports earlier in 2007 created a glut that ruined importers' margins. Still, China's net imports for the first five months of 2007 have exceeded net imports for all of 2006 by 30 percent.
Copper players seemed to shrug off the Chinese import figures, and instead were focused on another decline in London stockpiles, analysts said. "Today's decline was modest, but was important in view of yesterday's big bulge, and dispelled fears of a string of increases that an unusually large figure usually suggests," Man Financial metals analyst Edward Meir said.
London Metal Exchange copper warehouse inventories fell by 1,775 tonnes to 117,825 tonnes on Friday, while COMEX stocks declined 245 to 23,057 short tons on Thursday.
Meanwhile, copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 4 percent to 96,025 tonnes in the week ended Thursday, from 99,773 tonnes the previous week.
On the labour front, subcontract workers at Chile's Codelco, the world's largest copper producer, were set to meet with company executives to discuss demands for better working conditions. The workers have threatened strikes across the five divisions of Codelco, which produces about 1.8 million tonnes of copper per year, if a demand is not met.