LONDON: Copper prices slipped to their lowest level in more than two weeks on Monday as worries about demand in top consumer China and a stronger dollar spurred selling, but dwindling inventories outside China helped provide support.
Benchmark copper on the London Metal Exchange was little changed at $9,500 a tonne at 1046 GMT after earlier hitting $9,418, its lowest since Oct. 13.
"Copper stocks jumped in Shanghai, the overall number isn't high, but it could be the start of a trend, which would suggest weaker Chinese demand," a copper trader said.
Inventories: Stocks of copper in warehouses monitored by the Shanghai Futures Exchange rose more than 20% to 49,237 tonnes last week.
In LME-registered warehouses, copper stocks at 131,300 have nearly halved since late August. Cancelled warrants - metal earmarked for delivery - at 76% suggest LME copper stocks will fall further over coming days.
Energy crisis pushes copper towards best week since 2016
China: Concern about Chinese demand was reinforced by the official manufacturing Purchasing Manager's Index slipping to 49.2 in October, from 49.6 in September.
However, that was partly offset by the Caixin/Markit PMI rising to a four-month high of 50.6 in October, as new orders rose and disruptive power shortages eased.
Dollar: A strengthening US currency makes dollar-priced commodities more expensive for holders of other currencies, which would weigh on demand.
Technicals: Copper is testing support in the $9,540 and $9,470 area where the 100-day and 50-day moving averages currently sit. A break below could see the market trying to test $9,300 - the 200-day moving average.
"Buyers will need to defend current prices to keep hopes of gains alive," said Giles Coghlan, analyst at broker HYCM. "In a potential stagflationary environment ahead that may be a hard ask."
Tin: Shortages and historically low stocks helped tin rise 0.4% to $37,050 a tonne, close to the record high of $38,800 hit in October.
Other Metals: Aluminium gained 0.5% to $2,729 a tonne, zinc slipped 0.5% to $3,360 a tonne, lead added 0.1% to $2,386 and nickel climbed 0.4% to $19,530.