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Prices of base metals in London fell on Monday, weighed down by demand worries amid slowing global economic growth.
Three-month copper on the London Metal Exchange CMCU3 had lost 0.6% to $7,404.50 a tonne by 0455 GMT, after posting its first weekly gain in seven last week.
Weak growth in the world’s two major economies — the United States and top metals consumer China — has been pressuring copper prices, which have declined 32% since hitting a record high of $10,845 a tonne in March.
Copper, a metal used in a variety of sectors from electrical to transportation, is often used as an indicator of global economic health.
The outlook for copper demand is gloomy, with the global economy increasingly likely to be heading into a serious slowdown as the highest inflation in a generation prompts central banks to hike interest rates aggressively.
The U.S. Federal Reserve is widely expected to raise interest rates by 75 basis points at its policy meeting on July 26-27.
An elevated U.S. dollar added further pressure on metal prices, making greenback-traded metals more expensive to holders of other currencies. However, falling inventories and supply risks offered some support to prices.
Copper stockpiles in warehouses monitored by the Shanghai Futures Exchange fell 29.4% from the previous week to 50,350 tonnes on Friday.
“Recent price downtrend has sparked some buying activities that lowered inventories,” a trader said. “But given the overall bearish sentiment, it remains risky to stockpile big volumes.”
The most-traded August copper contract on the Shanghai Futures Exchange SCFcv1 rose 0.8% to 56,910 yuan ($8,424.37) a tonne.
ShFE lead climbed 0.5% to 15,175 yuan a tonne, tin SSNcv1 gained 0.8% to 191,950 yuan a tonne, and nickel rose 1.6% to 162,780 yuan a tonne.