Copper prices slipped for a fourth day overnight after the United States government announced tariffs on some European goods, adding to fears that a global economic slowdown will deepen, weakening demand for metal.
A large delivery of copper into London Metal Exchange (LME) warehouses and a widening of spreads between contracts meanwhile pointed to ample supply.
Benchmark copper on the LME traded down 0.4 per cent at $US5,655 a tonne in official rings.
The metal used in power and construction has tumbled more than 20 per cent from June 2018 highs.
Weak copper supply growth will likely tighten the market but prices will remain around current levels due to the poor demand outlook, said Deutsche Bank analyst Nick Snowdon.
The US administration said it would slap tariffs on European goods including cheese and Airbus planes as punishment for illegal EU aircraft subsidies.
The move comes amid a US-China trade dispute, with tariffs imposed on hundreds of billions of dollars’ worth of products, damaging the global economy.
Factory activity is falling in the United States, China and the euro zone, data this week showed.
On-warrant stocks of copper in LME-registered warehouses jumped to 195,425 tonnes, the highest since September 20, after 39,750 tonnes of arrivals.
The discount for cash copper versus three-month metal on the LME rose to $US35 this week, the most since August last year, pointing to plentiful availability.
Treatment charges by Chinese zinc smelters jumped to $US280, the highest since at least 2014.
“Higher treatment charges suggest that production will remain strong for the rest of the year,” analysts at ING said.
Despite expectations of increased supply, nearby availability remains tight, however, with cash zinc at a premium of $US41 to the three month contract, down from $US50 on Monday but still far above the long-term average.
Benchmark zinc did not trade but was bid down 1.8 per cent at $US2,277 a tonne, approaching a three-year low reached last month.
LME aluminium traded up 0.3 per cent at $US1,711 after touching $US1,704.85, the lowest since January 2017, on Wednesday.
Aluminium is the “worst affected of all the metals on the demand side,” said Deutsche Bank’s Snowdon.
Prices were likely to grind lower until either demand perked up or smelters began to curb supply, he said.
Speculators held a net short position in LME aluminium equal to 23 per cent of open contacts as of Tuesday, brokers Marex Spectron said.
The Shanghai Futures Exchange was closed as part of China’s Golden Week Holidays and will reopen on Tuesday.
Nickel traded up 0.7 per cent at $US17,610 a tonne, lead was bid 0.2 per cent higher at $US2,104 and tin was bid down 0.8 per cent at $US16,425.