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According to China Customs, China's unwrought copper and copper semis imports in June were 346,200 mt, down 17.5% MoM, and a monthly low for the year. Both LME and SHFE copper prices dropped overnight. As the most important copper consumer in the world, falling demand in China will negatively affect global copper prices, pushing down other base metals prices.
European debt crisis moved towards resolving, but faces new difficulties. The meeting of euro zone finance ministers agreed to postpone the deadline of Spain to cut deficit to 2014 with the requirement of further budget cut. But they failed to reach an agreement on the bailout to Spain's banking sector but will inject EUR 30 billion by the end of July. The market was disappointing as they meeting did not result in large scale bailout. Investors also concern as German constitutional court will decided if they will approve the implementation of ESM and the adjustment of budget stipulation. Fitch confirmed the rating of US at “AAA” and maintained the outlook negative. Uncertainty towards financial policies and European debt crisis threat the rating of the country. But the AAA rating of the US dollar is now steady, allowing the US dollar index to move at high levels.
Sliding Chinese economy and sluggish demand triggered concerns, and base metals prices should remain weak recently given ongoing European debt crisis. The market is awaiting China's GDP released later this week, and many investors are expecting more easing policies will be released by China's central bank, which will allow metals to rebound.
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