"The Chinese trade data that was published today is the reason why the copper price and other metal prices are not falling any further, as the figures reveal that China imported commodities in relatively large quantities last month".
-Commerzbank
According to the official data Chinese trade surplus rose less-than-expected last month. The report released by National Bureau of Statistics of China announced that Chinese trade balance rose to 49.98B, from 45.56B during the preceding month. Moreover, economists had expected data to reach 58.00B mark during the last month. In the meantime, value of China's exports continues to decline further in dollar terms during the previous month in line with expectations. Chinese imports, in turn, contracted at their slowest pace since 2014 in May, suggesting that government stimulus measures focused on housing and infrastructure are succeeding in stabilising demand. Chinese imports of unwrought copper and copper products plunged 3.7% on a monthly pace to 430,000 tonnes in May. This pushed imports to 2.31 million tonnes in January-May, up 22.1% year-on-year period. Meanwhile, analysts from Australian and New Zealand Bank do not expect strong rebound in import data since they predict that domestic demand will likely edge down on a tighter credit environment.
Also, it is worth to point out that trading in China is expected to slow ahead of Chinese CPI as well as businesses will close for the Dragon Boat festival on Thursday and Friday.
© Dukascopy Bank SA