COPPER futures posted mild gains today as downbeat Chinese copper import data curbed demand from investors searching for cheap assets or looking to pare bets on lower prices.
The most actively traded contract, for July delivery, settled up US2.55 cents, or 0.6 per cent, at $US4.0420 per pound on the Comex division of the New York Mercantile Exchange.
Investors continued to sort through last week's sharp declines in the commodities complex, with some deciding copper was a worthwhile investment at current price levels.
A steep cascade in silver prices last week, sparked by rounds of trading margin increases, spread across the commodities complex as investors scrambled to shed the risky assets in favour of cash.
"We've had this commodities correction so it's not all straight up for these markets," said Bill O'Neill, principal with LOGIC Advisors.
Nor is the copper price path all straight down, as many traders are finding this week.
While copper prices tumbled alongside other commodities last week, the metal's rebound is forcing some traders to pare back bets on lower prices, or short positions, which are becoming unprofitable as prices rise.
"There's still an element of short covering in these markets, all these markets are looking for their footing," said Ira Epstein, director of the Ira Epstein division of the Linn Group.
However, a steep drop in Chinese copper imports kept gains in check.
China accounts for about 40 per cent of world's copper demand, but the top consumer has been cutting back its purchases of the metal in recent months.
China imported 262,676 tonnes of copper in April, down 40 per cent from last year and a 14 per cent decline from March, according to preliminary data from the country's General Administration of Customs.
In the January-April period, imports fell 23 per cent to 1.17 million tonnes.
"This is the weakest April in three years," traders at RBC Capital Markets said in a note to clients.
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