Published: 12 Jul 2010 01:44:15 PST * China June copper imports unexpectedly fell * China June trade surplus stronger than expected * India's industrial output slower than expected LONDON, July 12 - Copper prices fell more than 1 percent in London on Monday after the world's top metals consumer China reported a drop in copper imports for the third straight month in June, casting shadows on the demand outlook. China's trade surplus in June jumped on surprising strength in exports, but copper imports fell by 17.3 percent to 328,231 tonnes. Three-month copper on the London Metal Exchange traded at $6,654 a tonne at 0906 GMT, after hitting a near two-week high of $6,775 in the previous session and versus Friday's close of $6,769 on Friday. "It should have been expected that this year the imports will be lower than last year, because a year and a half ago we had a massive build up in inventories," said Eugen Weinberg, an economist at Commerzbank. Beijing is scheduled to release a slew of economic data for June later this week, including economic growth, inflation and industrial output, expected to shed light on the health of the world's third-largest economy. "I would expect further weakening of imports in the coming months, Weinberg said, adding copper prices looked set to come under more pressure. "I wouldn't be surprised to see further pressure on the downside due to China's economic growth slowing down in the second part of the year." INDIA INDUSTRIAL OUTPUT Also on Monday, data showed India's May industrial output grew at a slower-than-expected 11.5 percent from a year earlier, signalling caution on the economic outlook. But a decline in copper stocks at LME-registered warehouses since February has given investors some optimism on the demand outlook. LME's copper stocks last fell 1,650 tonnes to 435,250 tonnes, to their lowest since late November last year. LME copper's cash-to-three-month spread reduced to just below $19, its narrowest since mid-February, caused by tightness in the spot market, according to traders. LME copper may end a rebound from $6,318 per tonne over the next one or two trading sessions, according to Reuters market analyst Wang Tao. For a graphic of the 24-hour LME copper technical outlook: http://graphics.thomsonreuters.com/gfx/WT_20101207094616.jpg Wall Street's earnings season unofficially begins with Alcoa Inc after the closing bell on Monday. The largest U.S. aluminum producer is expected to swing to a second-quarter profit, but weak aluminium prices could weigh. Aluminium traded at $1,986.25 from $2,004. Zinc was at $1,849 from $1,904 and battery material lead was at $1,820 from $1,845. Tin was unchanged at $17,650 and nickel was at $19,320 from $19,500. "A solid run of data may well provide the metals with enough impetus to break free of their recent ranges," Standard Bank said in a note. "However, for the meantime the market remains very uncertain with that lack of conviction reflected by the low turnover." Metal Prices at 0909 GMT Metal Last Change Percent Move End 2009 Ytd Percent move COMEX Cu 301.00 -3.95 -1.30 334.65 -10.06 LME Alum 1981.00 -23.00 -1.15 2230.00 -11.17 LME Cu 6654.00 -115.00 -1.70 7375.00 -9.78 LME Lead 1815.00 -30.00 -1.63 2432.00 -25.37 LME Nickel 19270.00 -230.00 -1.18 18525.00 4.02 LME Tin 17550.00 -100.00 -0.57 16950.00 3.54 LME Zinc 1845.00 -59.00 -3.10 2560.00 -27.93 SHFE Alu 14815.00 -70.00 -0.47 17160.00 -13.67 SHFE Cu* 53220.00 -500.00 -0.93 59900.00 -11.15 SHFE Zin 15135.00 -145.00 -0.95 21195.00 -28.59 ** Benchmark month for COMEX copper * 3rd contract month for SHFE AL, CU and ZN SHFE ZN began trading on 26/3/07

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