Copper prices fell on Thursday on worries of higher US rates, a weaker-than-expected Chinese demand rebound, and a risk-off sentiment amid issues in the banking sector.

Three-month copper on the London Metal Exchange declined 0.8% to $8,488.50 a tonne by 0345 GMT, while the most-traded June copper contract on the Shanghai Futures Exchange fell 0.9% to 66,490 yuan ($9,603.80) a tonne.

China’s industrial firms’ profits shrank at a slightly slower pace in January-March but the decline remained in the double-digits as the economy struggled to fully recover despite the country’s exit from its zero-COVID policy.

Copper bulls have been betting on a strong demand recovery from top metals consumer China, but the rebound has so far been relatively short-lived and weaker than expected.

Prospects of higher US interest rates could dampen the global economic growth and increased the likelihood of a stronger dollar, making greenback-priced metals more expensive to holders of other currencies.

Denting sentiment further were troubles from the US banking sector.

China’s demand is expected to be even weaker next week as the country enters a May 1-3 holiday.

LME aluminium edged down 0.2% to $2,322.50 a tonne, nickel declined 0.2% to $23,600 a tonne, zinc shed 0.9% to $2,622 a tonne, tin lost 0.9% to $25,520 a tonne while lead rose 0.1% to $2,107 a tonne.

Copper recovers on weaker dollar

SHFE aluminium fell 1% to 18,505 yuan a tonne, tin declined 0.6% to 205,710 yuan a tonne while nickel rose 0.3% to 179,710 yuan a tonne, zinc was up 0.2% to 21,115 yuan a tonne and lead edged up 0.1% at 15,295 yuan a tonne.