Copper prices fell on Tuesday due to concerns about demand in top metals consumer China and high inventories on top of persisting pressure from a strong dollar and higher-for-longer interest rate expectations.
Benchmark copper on the London Metal Exchange (LME) was down 0.2% at $8,130 a metric ton in official open-outcry trading. The metal used in power and construction touched its lowest since May 31 at $8,068 earlier in the session and lost 2.2% last week.
"Strength in the U.S. dollar, weak risk appetite coupled with concerns over China's property sector amidst a challenging global growth backdrop are weighing on the base metals complex," said Standard Chartered analyst Sudakshina Unnikrishnan.
China's top copper smelters on Friday maintained their fourth-quarter guidance for copper concentrate processing treatment and refining charges at a six-year high, indicating expectations of ample supply in the market.
This also hit trader confidence and curbed restocking activity ahead of a week-long holiday in China starting on Sept. 29, said SP Angel metals associate Arthur Parish.
"With sentiment as negative as this, markets could all use a holiday as well," Marex analyst Edward Meir said in a note, referring to broader commodities markets hit by the combination of higher interest rates and the strong dollar, "typically anathema to commodity bulls."
The dollar index hit a 10-month high, making dollar-priced metals less attractive for holders of other currencies.
Copper inventories in LME-registered warehouses rose further and reached 166,850 tons, the highest since May 2022, daily LME data showed.
The discount for cash copper over the three-month contract was at a 31-year high of $70.1 a ton as of the market close on Monday.
LME aluminium rose 0.2% to $2,237.5 a ton in official activity, nickel declined 0.8% to $18,970, zinc lost 0.2% to $2,527, tin fell 0.3% to $25,800 and lead added 0.4% to $2,189.
The global lead market was in a small deficit in January-July, while the zinc surplus widened, according to the ILZSG.
(Reporting by Polina Devitt in London Additional reporting by Mai Nguyen in Hanoi Editing by Mark Potter, Kirsten Donovan)