LONDON - Copper prices fell on Wednesday as weak Chinese economic data added to signs of low demand and ample supply, taking the heat out of a recent rally.
Benchmark copper on the London Metal Exchange (LME) was down 0.7% at $8,319 a tonne at 1120 GMT.
Prices had surged to a five-month high of $8,600 on Monday -- up 15% since the start of November -- on hopes that China would abandon its zero-COVID policy and U.S. interest rate rises would slow, lifting economic growth and metals demand.
But new home prices in China fell at their fastest pace in over seven years in October, according to data on Wednesday that underscored deepening contraction in the construction sector and followed weak manufacturing data on Tuesday.
China is by far the biggest metals consumer and COVID-19 cases are rising there, raising fears of wider lockdowns that would hamper economic activity.
China's yuan meanwhile weakened against the dollar, making dollar-priced metals costlier for local buyers.
Chinese copper import premiums have tumbled to $102.50 a tonne from $144.50 last week, suggesting lower demand for overseas metal.
Supply also suddenly looks ample on the LME, where quickly delivered cash copper has flipped from a premium of more than $100 versus the metal for delivery in three months to a discount of almost $30.
Copper is stuck between bears, who see a slack market, and bulls looking ahead to stronger demand as China lifts its COVID controls, said Gianclaudio Torlizzi, a partner at consultants T-Commodity.
"We need to wait for some weeks before the market takes a clear direction," he said. "In my view that direction will be higher."
LME aluminium was down 0.7% at $2,418 a tonne, zinc slipped 0.8% to $3,086, nickel fell 4.5% to $28,800 and lead was down 0.8% at $2,201.
Tin was the lone riser, up 4.2% at $24,375 a tonne.
(Reporting by Peter Hobson Additional reporting by Siyi Liu and Dominique Patton; Editing by Kirsten Donovan)