Copper prices slid further below $7,500 a tonne on Wednesday, a day after losing more than 3 percent as fears that rising inflation could lead to higher interest rates, slowing economic growth and demand for metal.
Copper for delivery in three months on the London Metal Exchange was at $7,475/$7,525 a tonne, down $35 or 0.5 percent from Monday's London close. "Fears of inflation and bearish sentiment regarding the general St one-month ago," Peter Richardson, chief metals economist at Deutsche Bank, said in a daily note.
"During this period, however, while base metals prices were initially extremely volatile, their ability to maintain historically high levels demonstrates their relative strength. Supply and demand fundamentals remain supportive, particularly in copper, nickel and zinc.
"Now that the traditionally weaker Northern Hemisphere summer has begun, we expect the trend of thinner trade to lead to more volatility, but also expect the elevated price environment to persist throughout the season."
On Tuesday, LME copper fell $270, or 3.5 percent, to close at $7,510 as a firm dollar and inflationary fears prompted a broad-based sell-off in the metals sector and equity markets, despite another 750-tonne fall in LME stocks.
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