Copper prices extended losses on Tuesday as speculators remained pessimistic about global growth and weak demand in China, while zinc slumped after a jump in inventories highlighted oversupply.
Three-month copper on the London Metal Exchange (LME) eased 1% to $8,798 per metric ton by 1000 GMT after dropping 1.8% on Monday and touching a 4-1/2-month low.
LME copper has slumped 21% from a record high of more than $11,100 scaled in May.
Global equity markets rallied on Tuesday after plunging a day earlier, but investors in metals markets were wary.
“There seems to be a bit of steadiness overnight, but I think the market is still pretty fearful of a big slowdown, no growth, and we haven’t really seen demand in China,” said Robert Montefusco at Sucden Financial.
“There’s been a lot of abandonment of long positions, a lot of CTA selling, funds and specs selling,” he added, referring to Commodity Trade Advisor (CTA) investment funds that are largely driven by computer programs.
The most-traded September copper contract on the Shanghai Futures Exchange tumbled to its lowest since March 13, closing down 3% at 70,850 yuan.
Although weak U.S. data last week fuelled worries about a potential recession, expected interest rate cuts could provide support.
Another bright spot is that the premium to import copper into China rose to $48 a ton on Monday, the highest since March 18.
Zinc was the biggest decliner on the LME, easing 2.1% to $2,579.50 after LME data on Tuesday showed that inventories surged by 8% to 247,825 tons, having more than tripled over the past nine months .
LME zinc is also the worst performer on the LME over the past month, shedding 14%.
Analysts expect a market surplus of zinc this year of 19,000 tons, jumping to 229,800 tons in 2025, according to a consensus forecast in a Reuters poll.
Among other metals, LME aluminium edged up 0.2% to $2,255 a ton, lead climbed 1.2% to $1,953.50 after tumbling 4.6% in the previous session, while nickel lost 0.4% to $16,210 and tin dipped 0.1% to $29,450.
($1 = 7.1478 yuan)
(Reporting by Eric Onstad; Additional reporting by Mai Nguyen in Hanoi; Editing by David Holmes)
