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FILE PHOTO: Gecamines' Shituru hydrometallurgical facility, which processes copper and cobalt, is seen in this general view, outside Likasi in the southern region of Katanga in the Democratic Republic of Congo, January 31, 2013.REUTERS/Jonny Hogg//File Photo
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)