Copper, zinc fall on rising inventories, trade war fears

LONDON: Copper and zinc extended losses on Tuesday as rising inventories highlighted healthy supplies, while concern about trade wars and a stronger dollar also weighed on industrial metals markets.

London Metal Exchange zinc stocks have shot up by 60 percent this month and climbed by another 5,350 tonnes on Tuesday to 211,400 tonnes.

"We've been arguing for a while that mine supply in zinc had picked up strongly last year and that would start to seep through to a less tight refined market and perhaps we're seeing evidence of that," said Caroline Bain, chief commodities economist at Capital Economics.

"We've always suspected that there were stashes of metal being held off market and when the price was right they would become visible."

Bain said investors also worried that protectionism would lead to slower global growth.

Fears of a global trade war mounted after U.S. President Donald Trump imposed hefty import tariffs on steel and aluminium earlier this month and, according to sources in Washington, the United States is set to unveil new tariffs specifically targeting China by the end of this week.

LME benchmark zinc was bid down 0.6 percent at $3,242 a tonne after failing to trade in official open outcry activity.