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PrintLondon copper was steady on Monday as data showing China's inflation cooled in June triggered hopes for policy easing by the top consumer of the metal, offsetting a bleak U.S. jobs report that drove down prices in the prior session.
China's annual consumer inflation came in at 2.2 percent, from May's 3.0 percent, leaving room for Beijing to ease policy without stoking upward price pressures and helping most commodities recover from previous session's losses triggered by the dismal U.S. jobs data.
Three-month copper on the London Metal Exchange edged up 0.1 percent to $7,538.50 per tonne by 0706 GMT,snapping three sessions of losses. Prices dropped more than 2 percent on Friday.
The most-active October copper contract on the Shanghai Futures Exchange fell 1 percent to 55,180 yuan ($8,700) per tonne, tracking the drop in LME prices in the previous session and heading for its third session of losses.
"Better-than-expected China inflation numbers supported sentiment, although technicals have a greater effect on prices lately as investors continue to trade within safe narrow ranges," said CIFCO Futures analyst Zhou Jie.
"In the short term, I see LME copper bound between $7,350 and $7,600, and Shanghai copper between 54,500 yuan and 56,000 yuan," he added.
In the physical markets, overall demand remains weak although prices were supported by a slight uptick in Chinese demand, with signs of large fabricators benefitting from state grid construction orders in June, Macquarie Commodities Research analyst Bonnie Liu said in a note on Monday.
She added that recent tightness in scrap copper supply also diverted more demand towards refined copper.
"A drop in international scrap supply, particularly high quality material, is putting more pressure on Chinese fabricators to use refined copper," she said.
Investors are now awaiting fresh trading cues from a slew of China data due later this week, including GDP figures and commodities trade data.
Arrivals of copper may have fallen in June compared to the previous month, with term shipments in a seasonal decline, whereas GDP numbers are likely to show its weakest expansion inthree years.
In the euro zone, better-than-expected German industrial production numbers were encouraging, but officials cautioned against expectations of quick solutions to problems there, especially out of a meeting later in the session among the bloc's finance ministers.
The festering euro zone debt crisis has muddied the demand outlook for commodities, pushing down LME copper prices by almost 9 percent in the second quarter.
In industry news, BHP Billiton will tighten global copper supply from late 2013 onward if it postpones work on its single-biggest project, the $30 billion expansion of the Olympic Dam mine in Australia.
In aluminium, China's provincial governments are propping up a quarter of domestic production through power subsidies despite soft global demand, consultancy AZ China said on Friday.
"The subsidies are too small to prompt supply expansions by subsidized plants or to revive shuttered plants. But by doing this, China is delaying its plan to eliminate inefficient, high-cost capacities and to address its overcapacity problem," said a Shanghai-based trader.
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