LONDON: Copper prices weakened on Tuesday, pressured by investor disappointment that China failed to ease its strict COVID-19 policy and as a global economic downturn dampens metals demand.
Three-month copper on the London Metal Exchange (LME) had dropped 1.7% to $7,435 a tonne by 1600 GMT.
US Comex copper futures shed 1.6% to $3.36 a lb.
LME copper has given up 30% since touching a record peak in March but has largely held in a range between $7,200 and $8,000 since the end of August.
“The macro headwinds continue to mount. The markets have a lot to face over coming months and today the dollar is stronger, so that’s an additional headwind,” said independent consultant Robin Bhar.
“The market was looking for some positive inputs and so far it hasn’t come from China, since there wasn’t any mention of moving away from the zero-COVID strategy.”
Chinese President Xi Jinping reiterated the validity of China’s zero-COVID policy at the Communist Party Congress. Some market participants had hoped that China would ease its curbs, which include lockdowns and other restrictions.
The Shanghai copper front-month November contract’s premium over the second-month December contract fell to 870 yuan ($120.89) a tonne from a 13-year high of 1,950 yuan on Friday, indicating easing tightness of immediately available metal.
ShFE copper inventories rose sharply on Oct. 14, but tight overall supply in China continued to lend support and cushion prices from steep falls.
“The (Chinese copper) consumer side is expected to remain resilient. It is expected that the tight spot pattern will continue until mid-November,” Jinrui Futures said in a note.
Owners of copper in LME warehouses have been giving notice they want to take out their material so they can ship it to China, where demand is stronger, Tolentino Teixeira at broker Sucden Financial said in a webinar.
More inflows of aluminium into LME warehouses weighed on LME prices, which eased 1.7% to $2,191.50 a tonne.
LME aluminium inventories have shot up 46% this month, LME data showed.
Among other metals, LME nickel climbed 1.6% to $21,885 a tonne and zinc added 0.2% to $2,873.50, but tin dropped 1% to $19,455 and lead slipped 0.3% to $2,021.