LONDON: Copper fell on Tuesday as stock markets and oil prices dived and the dollar strengthened, but prices remained near two-year highs as London Metal Exchange (LME) inventories hit 15-year lows and speculators bet on a further rally.
Benchmark copper on the LME was down 1.8% at $6,670.50 a tonne at 1600 GMT.
The metal reached $6,830 on Sept. 1 - up more than 50% from a low in March - as demand from top consumer China revived and speculative investors raised their punt on higher prices to the biggest since June 2018.
"The macro picture looks pretty strong," said Robin Bhar, an independent analyst. "Activity in China is more or less back to normal, and the fourth quarter tends to be a good period for metals activity and demand."
"The mantra has to be, buy the dips."
Copper inventories in LME-registered warehouses fell 1,000 tonnes to 76,550 tonnes, the lowest since December 2005, and a steep premium for cash copper over three-month metal pointed to a tight market.
Stocks in Comex-registered warehouses in the United States are also declining, but inventories in Shanghai Futures Exchange and Chinese bonded warehouses are up since June.
China's new bank loans are expected to have risen in August as the central bank spurred liquidity. Copper's rally has further to run if the link between Chinese demand and credit availability fully reasserts itself, analysts say.
Indonesia's refined tin exports in August were 6,158.67 tonnes, up 11.6% year-on-year.
LME aluminium was down 0.2% at $1,793.50 a tonne, zinc fell 3.7% to $2,417, nickel slipped 2% to $14,885, lead lost 3% to $1,911 and tin was down 1.6% at $18,035.
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