Copper prices fell on the London Metal Exchange (LME) on Tuesday as weak US economic data stoked concerns about the outlook for global growth and metal demand.
Stocks slid amid evidence of a cooling labor market and sluggish U.S. manufacturing orders. The move came after the Organization of the Petroleum Exporting Countries (OPEC) and its Allies announced a surprise production cut over the weekend, sending oil prices sharply higher and potentially contributing to higher inflation.
Copper for three-month delivery on the LME fell 1.86%, or $166, to $8.751 a tonne at 17:00 London time on April 4 (00:00 Beijing time).
Chinese markets are closed for a public holiday and will resume trading on Thursday morning.
Copper prices have risen from a low of $6.955 last July as top consumer China improved its quarantine policies, but rising interest rates and concerns about the global economy and bank lending have dragged prices down from January's peak of $9.550.50.
"The improvement in Chinese demand is likely to be overshadowed by credit concerns in the US and Europe, strong mine supply and an uptick in Chinese refined copper production," said analysts at BNP Paribas, who forecast "limited price upside in the second half of 2023".
Chinese demand has not climbed as strongly as many had expected.
Still, many analysts and investors remain bullish.
Saxo Bank strategist Ole Hansen said: "Higher (copper) demand for electric vehicles, renewable power generation and energy storage and transmission has overshadowed the slowdown in Chinese property...... And the slowdown in the West."
The prospect of tight supply in the next few years should push copper prices to record highs above $10.845 in the second half of 2023, he said.
Global copper smelting activity fell in March, according to satellite monitoring of metal processing plants.
