LONDON: Copper prices extended losses on Tuesday as speculators remained pessimistic about global growth and weak demand in China, while zinc slumped after a jump in inventories highlighted oversupply. Three-month copper on the London Metal Exchange (LME) eased by 0.2% to $8,872 a metric ton by 1400 GMT after dropping 1.8% on Monday and touching a 4-1/2-month low. LME copper has shed 21% from a record high of more than $11,100 in May.
Wall Street’s main indexes rose in volatile trading on Tuesday after plunging a day earlier, but metals markets remained wary. “There seems to be a bit of steadiness overnight, but I think the market is still pretty fearful of a big slowdown, no growth, and we haven’t really seen demand in China,” said Robert Montefusco at Sucden Financial.
“There’s been a lot of abandonment of long positions, a lot of CTA selling, funds and specs selling,” he added, referring to Commodity Trade Advisor (CTA) investment funds that are largely driven by computer programs.
The most-traded September copper contract on the Shanghai Futures Exchange tumbled to its lowest since March 13, closing 3% down at 70,850 yuan.
Though weak US data last week fuelled worries about a potential recession, expected interest rate cuts could provide support. Another bright spot is that the premium to import copper into China rose to $48 a ton on Monday, its highest since March 18. Zinc was the biggest faller on the LME, retreating 1.3% to $2,599.50 a ton after LME data on Tuesday showed that inventories surged by 8% to 247,825 tons. Inventories have more than tripled over the past nine months. LME zinc is also the worst performer on the LME over the past month, with a 14% decline. Analysts expect a zinc market surplus of 19,000 tons this year, jumping to 229,800 tons in 2025, according to a consensus forecast in a Reuters poll.
Lead rebounded 1.2% to $1,954 a ton after tumbling 4.6% in the previous session. “The improved arbitrage window provided some support to today’s lead price,” broker Marex said in a note. Among other metals, LME aluminium gained 0.8% to $2,267.50 a ton, tin rose 0.6% to $29,655 while nickel slipped 0.5% to $16,200.
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