LONDON: Copper prices were heading for a weekly drop on Friday after three weeks of gains as concerns over global economic growth following interest rate hikes offset support from declining stocks at the London Metal Exchange (LME).

Benchmark copper on the LME was down 2.2% at $8,389.5 a metric ton by 1601 GMT. The contract is down 2% so far this week.

“Copper trades lower in sympathy with the rest of the growth-dependent commodities following a week that delivered surprisingly hawkish rate hikes while (US Federal Reserve Chair Jerome) Powell said the FOMC is not done yet either,” said Ole Hansen, head of commodity strategy at Saxo Bank.

Making dollar-priced commodities less attractive to holders of other currencies, the dollar rose as the risk of higher rates triggering an economic downturn pushed some investors to seek safe-haven assets including the US currency.

Copper stocks in the LME-registered warehouses continued to decline, the exchange’s daily data showed on Friday, with headline inventory falling to a one-month low of 79,300 metric tons after 1,100 metric tons of outflows.

Declining stocks have heightened market concern about the availability of copper, used in power and construction, for immediate supply. These concerns support backwardation - a premium for the cash over the three-month contract, which was last at $15 on Friday, up from $5.25 on Thursday.

On the technical front, copper was supported by the 50-day moving average, currently at $8,322.

Among other metals, aluminium lost 1.1% to $2,176, zinc shed 3.8% to $2,364, lead decreased 1.7% to $2,127, tin was down 1.6% at $26,645 and nickel was up 0.5% to $21,285 per metric ton.

LME aluminium was on track for its biggest weekly fall since Feb. 10 and nickel was set for its steepest weekly decline since May 12.