Copper falls over 2%, heads for worst month since November
Copper prices fell over 2% on Wednesday, heading towards their worst month since November amid weak data from top metals consumer China and lingering trade uncertainty.
Benchmark copper on the London Metal Exchange (LME) fell 2.2% to $9,231 a metric ton by 1045 GMT, its lowest level since April 17. Prices fell 5% in April.
The Comex copper contract was down 4.3% to $4.63 per lb, lowest since April 17.
Data on Wednesday showed that China's factory activity contracted at the fastest pace in 16 months in April, keeping alive calls for further stimulus.
'Copper is currently being held back by macroeconomic uncertainty,' said SP Angel analyst John Meyer.
'While Trump tariffs threaten to create a mini-recession in the West, we feel that new stimulus in China and much of Asia will continue to keep manufacturers going and drive growth.'
Weighing on financial markets was a lack of progress in de-escalating the U.S.-China trade conflict.
China demand drives up copper prices ahead of national holiday
Despite claims from U.S. officials that talks are ongoing, China has denied any active discussions. U.S. Treasury Secretary Scott Bessent said on Tuesday that over time, it will be evident to Beijing that Chinese tariffs are not sustainable for the world's second-largest economy.
Data due to be released on Wednesday is likely to show that the U.S. economy likely stalled or even contracted in the first quarter.
The dollar index edged up, making dollar-priced metals costlier for buyers using other currencies.
Keeping a floor under copper prices were another huge drop in inventories in warehouses monitored by the Shanghai Futures Exchange (SHFE), which dropped 23.5% from last Friday to 89,307 tons, their lowest since January 17. Last week, they slid 32%.
The reduction in stocks has been driven by diverted copper to the U.S. amid tariff threats on U.S. imports, as well as tight scrap supplies.
'The shortage of scrap into China is a major issue with a huge copper concentrate deficit causing Chinese smelters to reduce capacity,' said Meyer.
Aluminium fell 1% to $2,442 a ton, zinc lost 0.5% to $2,635.5, lead eased 0.7% to $1,963.5, tin rose 0.4% to $32,015 and nickel rose 0.3% at $15,595. All the metals were headed for monthly declines.
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