LONDON - Copper prices hovered near four-month lows on Wednesday as uncertainty about China's property market was reinforced by mounting problems at Evergrande as the market waited for data from the country's large industrial base.
Benchmark copper on the London Metal Exchange traded 0.2% lower at $8,074 a metric ton in official rings, from an earlier session low of $8,071. Used in power and construction, copper earlier this week hit $8,068, the lowest since late May.
Latest development in China's stalled property market was news that Evergrande's chairman is under police surveillance, according to Bloomberg News, which has added to concerns about the company's future.
"It highlights just how precarious things are and the problems facing copper demand and industrial metals overall," a metals trader said. "The strong dollar is a major headwind."
The U.S. currency scaled 10-month highs against major peers, making dollar-priced commodities more expensive for holders of other currencies, which would subdue demand. This relationship is used by funds to generate buy and sell signals from numerical models.
A large drop in profits at Chinese industrial firms in the first eight months of the year also weighed as the market waited for surveys of purchasing managers in manufacturing, later this week. Focus will be on new and export orders.
Elsewhere, the discount for the cash over the three-month copper contract narrowed after hitting 31-year highs on Monday. Traders said this was due to a large holding of warrants in the LME system.
However, climbing copper stocks in LME-registered warehouses are a negative. At 167,850 tons, they are up more than 200% since the middle of July and the highest since May last year.
Meanwhile, battery metal lead has come under pressure from higher LME stocks , up more than 40% over the past couple of weeks.
The lead price was last down 1.2% at $2,159.5 a ton, a 5% drop since Sept. 15.
Aluminium fell 0.8% to $2,225, zinc was down 1% at $2,486, tin retreated 1.8% to $25,550 and nickel slipped 0.1% to $18,850.
(Reporting by Pratima Desai; editing by Shilpi Majumdar and Louise Heavens)