SHANGHAI: Copper prices fell about one per cent in London and Shanghai on Monday as China reported a drop in copper imports for the third straight month in June, leading to caution on the demand outlook by the key buyer of the metal. China's trade surplus in June jumped on surprising strength in exports, but copper imports fell by 17.3 per cent to 328,231 tonnes. "I wasn't surprised at the June data -- the arbitrage wasn't favourable to (copper) imports most of the time, and there were high stockpiles in China," said a Shanghai-based trader. But "there are still many uncertainties in the economic picture." Also on Monday, data showed India's May industrial output grew at a slower-than-expected 11.5 per cent from a year earlier, signalling caution on the economic outlook. Three-month copper on the London Metal Exchange fell $89 to $6,680, after hitting a near two-week high of $6,775 in the previous session. Shanghai's benchmark third-month copper futures contract closed down 0.9 per cent at 53,220 yuan a tonne, after reaching 53,920 yuan on Friday, its highest since June 29. The most-active contract for October delivery was down 1 percent at 53,060 yuan a tonne, possibly indicating expectations that demand may recover in the second half of the year. "The market is focused on China's economy. Investors believe that the government may loosen its grip in the second half, which will be bullish for metals," said Liu Xu, an analyst at China International Futures. 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. 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. "But we won't see a flip to backwardation any time soon, because the overall stocks level is still pretty high, and the global consumption is not expected to recover rapidly," said Lin Yuhui, deputy general manager at Jinhui Futures. LME's copper stocks fell 2,100 tonnes to 436,900 tonnes on Friday, their lowest since late November last year, but up nearly 70 per cent from a year earlier. The ratio of cancelled warrants -- materials earmarked for delivery -- started to rise in early June and peaked at nearly 8 per cent last week, before easing to 6.7 per cent on Friday. 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.

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