METALS-Copper climbs as grim China trade data stokes easing hopes
* China exports fall for first time in 17 months
* Customs says outlook for China exports in Q3 is weak
* China's copper imports up 5.9 percent to 379,951 T in June
* Coming Up; FOMC releases minutes from June meeting at 1800 GMT
(Recasts, adds quotes, detail) SINGAPORE, July 10 (Reuters) - London copper rose on Wednesday after top metal user China reported surprisingly weak trade data for June and flagged a grim outlook for third quarter exports, raising speculation that Beijing may have to ease policy to keep growth targets. China's total exports fell 3.1 percent in June from a year earlier, the first decline since January 2012, while imports dropped 0.7 percent, leaving the country with a trade surplus of $27.1 billion for the month, the Customs Administration said on Wednesday. "The data was so poor guys convinced themselves over lunch that the government would step in," a London based analyst said.
Three-month copper on the London Metal Exchange turned positive at $6,780 a tonne by 0731 GMT, up 0.74 percent. It earlier fell as low as $6,685 a tonne, within reach of a three-year low level of $6,602 hit on June 25. Copper prices fell 1.5 percent in the previous session and are down more than 14 percent for the year. The most-traded November copper contract on the Shanghai Futures Exchange fell 0.76 percent to 48,630 yuan ($7,900) a tonne, having earlier dropped to 48,020, its lowest since late June. Fuelling hopes of government action after the disappointing trade data were comments by Chinese Premier Li Keqiang, who reiterated that the government will maintain the stability and continuity of policy in a bid to stabilize market expectations.
"The market suddenly has latched on to the idea that China can cut its RRR ratio," said analyst Nic Brown of Natixis in London, referring to the required reserve ratio. Such a move would be consistent with an effort to maintain stable growth targets in the midst of a campaign to rein in China's shadow banking sector and bring it onto balance sheets, he said. The customs office said a government crackdown on speculative activity may have laid bare China's real trade picture and that the country faces serious challenges ahead.
The market will now be looking at China's second-quarter gross domestic product reading due next week. A slew of data this month is expected to show growth is grinding towards a 23-year low. China's imports of copper in June rose 5.9 percent from the previous month to 379,951 tonnes, customs data showed. Imports were driven by China financiers, looking to import cheaper international material to the domestic market, said Natalie Rampono, an analyst with ANZ in Melbourne. "Year on year it's up about 10 percent ... it's encouraging," she said. "We still have a very cautious view on China, if you look at the headline number, export figures are really low and worse than expected so that could weigh on prices near term."
PRICES Base metals prices at 0732 GMT
Metal Last Change Pct Move YTD pct chg LME Cu 6780.00 50.00 +0.74 -14.49 SHFE CU FUT NOV3 48630 -370 -0.76 -15.69 HG COPPER SEP3 3.08 0.01 +0.34 -99.16 LME Alum 1804.75 14.75 +0.82 -12.86 SHFE AL FUT OCT3 14260 00 +0.00 -7.07 LME Zinc 1881.75 12.75 +0.68 -8.81 SHFE ZN FUT OCT3 14560 -985 -6.34 -6.34 LME Nickel 13500.00 175.00 +1.31 -21.31 LME Lead 2051.25 14.25 +0.70 -12.34 SHFE PB FUT 13850.00 -45.00 -0.32 -9.18 LME Tin 19451.00 146.00 +0.76 -16.88 LME/Shanghai arb^ ---
Shanghai and COMEX contracts show most active months
($1 = 6.1295 Chinese yuan)
(Editing by Muralikumar Anantharaman and Tom Hogue)