Copper prices slid overnight, with sentiment hit by concern about a second wave of the coronavirus and uncertainty whether demand would recover swiftly or stay subdued for longer.
Benchmark copper on the London Metal Exchange was down 1.3 per cent at $US5,709 a tonne at 1557 GMT.
Central bank stimulus triggered buying last week, helping fuel a rise in the copper price to $US5,928 a tonne, a 35 per cent increase since mid-March and the highest since late January.
“A second wave is partly behind the fall,” said Richard Fowler, strategist at Simpson Spence Young. “But whether the uptrend remains intact will depend on whether demand has just been deferred or changed significantly.”
Several districts in Beijing set up security checkpoints, closed schools and ordered people to be tested for COVID-19 on Monday after an unexpected spike of cases linked to the biggest wholesale food market in Asia.
Manufacturing activity in China is a major indicator of industrial metals demand, as the country accounts for half of global consumption.
China’s factories stepped up production for a second straight month in May, although the weaker-than-expected gain suggested the recovery remained fragile.
Central banks have cut interest rates, providing in some cases unprecedented amounts of stimulus to help soften the blow to the global economy from the coronavirus pandemic and to keep markets functioning.
Chilean copper miners’ unions called for a re-evaluation of continuity plans for the country’s biggest miners during what they said was an “alarming” increase in coronavirus cases among workers.
Major support for copper is at $US5,660, where the 200-day moving average currently sits.
Aluminium was down 0.6 per cent at $US1,576, zinc rose 0.6 per cent to $US1,988, lead dropped 0.7 per cent to $US1,745, tin ceded 1.7 per cent to $US16,825 and nickel lost 0.5 per cent to $US12,730 a tonne.