lb. LME copper has given up about 7% since touching a seven-month peak of $9,550.50 a tonne in January, mainly on concern over demand in China and climbing global interest rates.
"It's still the headlines about the U.S. banks that's the
dominating factor today, creating broad risk-off sentiment
across markets. So far the contagion to metals is limited, but
we're closely watching these events," said Amelia Xiao Fu, head
of commodity market strategy at Bank of China International.
A stronger dollar index also weighed on the metals
market. A stronger dollar makes commodities priced in the U.S.
currency more expensive for buyers using other currencies.
The dollar edged higher on Tuesday as traders set aside a
fairly strong reading of consumer price data and tried to gauge
whether the U.S. Federal Reserve will raise interest rates next
week after the collapse of two banks sparked widespread market
unease. Uncertainty about the pace of recovery of metals demand in
China was also undermining prices.
"In China, we're seeing very tentative signs of improving
demand, but it's still going to take weeks or even a month or
two to recover," Fu said.
The Yangshan copper premium rose to $25 a
tonne on Monday for its highest since March 1, indicating
improving demand for imported copper into China, albeit still
far below the $150 a tonne premium hit last October.
Analysts expect Chinese copper demand to improve in late
March or from the second quarter after the easing of COVID-19
restrictions.
LME nickel gave up earlier gains and slipped 0.5% to
$23,005 a tonne after LME on-warrant inventories - material not
earmarked for removal - fell to a one-year low of 38,610 tonnes. LME aluminium gained 0.6% to $2,348.50 a tonne and
lead added 0.4% to $2,090.50 while zinc dropped
1.1% to $2,914 and tin fell by 1.2% to $22,925.
For the top stories in metals, click ($1 = 6.8723 yuan) (Reporting by Eric Onstad Additional reporting by Mai Nguyen in Hanoi Editing by Ed Osmond and David Goodman)
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