Indiana Grain Company, LLC

Posted: 07/11/10

By: tomgrisafi

Commodity prices may have had a good run last week, but that improved tone may not last with news that China's imports of some key commodities fell sharply in June.

Copper and iron ore shipments were down noticeably in the monthly trade figures released over the weekend.

Oil imports rose strongly because of the solid level of growth in the economy with energy needs soaring.

But a 9.1% drop in iron ore imports from May and a 17% fall in imports of unwrought copper surprised traders analyzing the figures over the weekend.

Coming after copper prices staged a solid 4.7% rebound last week, the news will cause quite a few traders to rethink their outlook for both Chinese demand and world prices.

Copper prices rose, capping a weekly gain, on increasing hope that global growth and metals demand will rise.

That was after the 17% fall in the June quarter.

London Metal Exchange stocks fell again last week, for a 20th consecutive week, which traders took to mean consumption was going well.

But the news of the sharp fall in Chinese imports will have them scratching their heads as they had assumed a similar fall in stocks in Shanghai was a sign of rising imports.

Source: British IB Times