By Anna Stablum July 12 (Bloomberg) -- Copper dropped in London as a stronger dollar and falling imports into China added to concerns of a slowdown in demand. The Dollar Index, a six-currency gauge of the dollar’s strength, rose as much as 0.6 percent, making dollar-priced metals more expensive to other holders. China’s imports of copper and copper products fell to 328,231 metric tons in June from 396,710 tons in May, the customs bureau said July 10. China is the biggest consumer of copper used in wires and pipes. “Copper imports were certainly weaker than I’d expected,” Nic Brown, an analyst at Natixis Commodity Markets Ltd. in London, said by phone. “For the last two months China has been working off inventory.” Copper for delivery in three months fell $105, or 1.6 percent, to $6,655 a ton at 10:03 a.m. on the London Metal Exchange. Futures for September delivery declined 1.3 percent to $3.0145 a pound on the Comex in New York. The dollar has strengthened 8.4 percent this year, contributing to LME copper’s 9.6 percent slide. Copper also has eased on concern that Europe’s debt crisis may crimp usage of metals and demand may wane in China as the government moves to restrain the nation’s surging economy. “We expect the second quarter to be substantially slower than the first quarter,” Natixis’ Brown said. “If China is slowing to a more sustainable pace of growth as stimuli wear off, that isn’t a problem. If it is slowing more aggressively than that, it may become a problem.” China imported 350,000 tons of scrap copper in June, up from 330,000 tons in May, according to the July 10 report. Rising scrap imports “surprised market participants as stricter customs rules were expected to undermine imports,” Marc Elliott, an analyst at Fairfax IS in London, said in a report today. Copper Stockpiles Sliding Copper stockpiles tracked by the LME shrank for a 17th day to 435,250 tons, the lowest level since Nov. 27, according to the LME’s daily warehouse report. They’re down 13 percent this year and headed for the first annual drop since 2004. Bookings to remove metal from LME warehouses fell for a third day, down 7.5 percent to 27,350 tons. Copper futures outstanding, or market open interest, rose to 443,072 contracts as of July 8, the highest level since March 5, 2009, LME data showed. Aluminum open interest rose to the highest since August last year, the figures showed. Aluminum for three-month delivery on the LME fell 1.1 percent to $1,983 a ton. Chinese imports of aluminum and the metal’s products were about 74,580 tons last month, compared with 94,490 tons in May, according to the report. Lead declined 1.5 percent to $1,817 a ton, nickel dropped 1 percent to $19,300 a ton and zinc was 2.9 percent lower at $1,849 a ton. Tin was unchanged at $17,650 a ton. --Editors: Claudia Carpenter, John Deane To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net. To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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