LONDON - Copper prices fell on Tuesday as worries about demand in top consumer China and elsewhere due to a slowdown in growth were reinforced by rising inventories, while a lower dollar provided some support.
Benchmark copper on the London Metal Exchange (LME) was down 1.3% at $7 328/t at 11:04 GMT, a drop of more than 30% since a record high at $10 845/t in March.
Prices staged a recovery on Monday as traders pared bets on how aggressive the US Federal Reserve would be in raising rates later this month.
"Individual metals aren't really being driven by their own fundamentals, macro factors are driving metals at the moment," said Caroline Bain, chief commodities economist at Capital Economics.
"The growth outlook has deteriorated ... prices could fall a little further, there is momentum there, but they will stabilise fairly shortly at these lower levels."
Chinese cities have lifted Covid restrictions.
But Japanese Bank Nomura said 41 Chinese cities were currently implementing full or partial lockdowns or some kind of district-based control measures, affecting 22.8% of the country's gross domestic product.
"China lockdowns aren't over yet, neither are the headwinds to demand," a copper trader said. "More interest rate rises are expected ... I can't see many positives at this stage. The dollar is softer today, but that could change quickly."
China accounts for about half of global copper consumption estimated at around 25-million tonnes this year.
A lower US currency makes dollar-priced commodities cheaper for holders of other currencies, which could help demand. But the Fed is expected to hike interest rates another 75 basis point again later this month, which will boost the dollar.
Stocks of copper in LME registered warehouses rose 5 925 t to 136 200 t, up 20% since June 23.
Receding worries about copper availability on the LME market have seen the premium for the cash over the three-month contract CMCU0-3 turn into a discount which was last at $15 a tonne.
Elsewhere, aluminium was little changed at $2 426/t, zinc slipped 1.7% to $2 956, lead fell 2% to $1 958, tin was down 1.2% at $24 415 and nickel gained 3.46 to $21 400.