(Updates prices, adds trader comment in paragraph 2) By Pratima Desai LONDON, June 5 (Reuters) - Copper prices came underpressure on Monday from worries about demand, particularly intop consumer China, and a stronger dollar which makes metalspriced in the U.S. currency more expensive for holders ofothers. However, copper recovered after the New York open as thedollar retreated in afternoon trade after the release of weakU.S. economic data, traders said. Benchmark copper prices on the London Metal Exchange(LME) had gained 1.5% to $8,359 a tonne by 1607 GMT. Prices ofthe metal used in the power and construction industries havedropped 10% since the middle of April. Traders said activity was subdued and that Chinese tradedata later this week could provide clues to demand.
"China does not represent any upside risk to metal marketsfor now. Its property market is too soft and too important to bedisregarded," said Julius Baer analyst Carsten Menke. "But the long-term outlook for copper from the energytransition has not changed, it is still bullish. Around $8,000 atonne would be a good buying opportunity." China is working on new measures to support the propertymarket, but consumer caution about big-ticket spending amidconcerns over incomes and jobs as a post-pandemic recovery losessteam is a headwind. Rising stocks of copper in LME-registeredwarehouses, which at 98,950 tonnes have nearly doubled sinceApril 18, are also partly behind copper price weakness. However, fresh cancellations - metal earmarked for deliveryfrom LME warehouses - in Busan, Korea of 17,050 tonnes of copperand large holdings of contracts for nearby delivery have fuelledsome concern about supplies on the LME market.
This has narrowed the discount for the cash against thethree-month contract to around $2 a tonne comparedwith $66 a tonne on May 23.
On the technical front, copper faces strong upsideresistance at the 200-day moving average currently sitting at$8,375 a tonne, with trendline support at $8,170. Worries about demand also weighed on other industrialmetals.
Aluminium slipped 0.8% to $2,245, zinc ceded0.4% to $2,297, lead was down 0.2% at $2,028, tin lost 0.1% to $25,620 and nickel fell 1.3% to$20.925 a tonne. (Reporting by Pratima Desai; Editing by Jan Harvey andAlexander Smith)
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