LONDON: Copper prices slumped on Thursday on uncertainty over further U.S. rate hikes and a sluggish recovery of demand in China, while zinc hit a five-month low after a ramp-up in inventories.

Three-month copper on the London Metal Exchange dropped 1.1% to $8,866 a tonne by 1010 GMT, the lowest in a week.

Federal Reserve Bank of New York President John Williams said on Wednesday that inflation was still too high and the U.S. central bank would take measures to lower it.

Amelia Xiao Fu, head of commodity market strategy at Bank of China International, said the more hawkish rhetoric hit the market amid increasingly divergent views from Fed policymakers, spurring volatility.

“Most market participants expect a U.S. rate hike in May, but are unsure about what the path is going to be after that,” she said.

An uneven economic rebound in China, the world’s biggest metals consumer, is also weighing the market, Fu added.

Copper edges higher after strong Chinese growth data

“In China, some of the downstream metals demand is not very robust. It’s recovering, but it’s gradual. Most economic growth has been concentrated in the service sector.”

The Yangshan copper premium, which indicates the demand for imported copper into top consumer China, was at $27.50 a tonne on Wednesday, down 45% from nearly five weeks ago, SMM data on Refinitiv Eikon showed.

The most-traded May copper contract on the Shanghai Futures Exchange closed 0.4% lower at 69,350 yuan ($10,072.33) a tonne.

LME zinc fell 1.2% to $2,756.50 a tonne, after touching the weakest since Nov. 4 last year.

LME inventories have jumped 21% over the past two days and have more than tripled over the past two months.

“In zinc, over the past couple of years there’s been low inventories coupled with mine tightness, but this year the supply side is improving, the fundamentals are becoming more relaxed,” Fu said.

LME aluminium shed 0.8% to $2,426.50 a tonne, lead slipped 0.4% to $2,147.50 and tin dropped 1.3% to $26,720, while nickel gained 0.7% to $25,725.