Copper dives as China demand fears overshadow mine strike ballot

Copper prices fell on Monday as investors shrugged off a potential strike at the world's largest copper mine and focused instead on economic data this week expected to show slowing growth in top metals consumer China.
Benchmark copper on the London Metal Exchange (LME) closed down 0.8 percent at $6,250 a tonne while the most traded contract on the Shanghai Futures Exchange fell 1.4 percent.
Concerns over the impact of trade tensions on metals demand were still driving the market after helping to push copper down around 15 percent on the LME since early June, said ING analyst Oliver Nugent.
"You had a couple of stable days last week and then the market started (on Monday) with a wave of profit taking out of China, restoring the downward sentiment," he said.
Workers at Chile's Escondida copper mine rejected a final contract offer and began a vote on strike action that will end in the middle of this week. Last year, a 44-day strike at the mine pushed copper prices sharply higher.
Fears of supply interruptions were matched by worries of weaker demand in China, where factory sector growth is expected to have slowed for a second month in July. The official PMI survey is due on Tuesday and the private Caixin manufacturing PMI on Aug. 1.
Investors are betting that copper prices will continue to fall, with the net short position on the Comex exchange the largest in nearly two years.
Benchmark LME zinc finished down 1.5 percent at $2,557 a tonne. It has fallen almost 30 percent since February and is near a one-year low of $2,473.85 hit on July 20.
Zinc was holding just above support at the 50 percent retracement of its two year rally from 2016 to early 2018 and its 2017 low of $2,427.50.
The premium of cash zinc over the three month contract has surged to $60.25, the highest since October, suggesting a shortage in nearby supply.
While copper and zinc stocks in LME-registered warehouses were fairly stable in July, stockpiles in Shanghai Futures Exchange storehouses fell, with copper down 25 percent at 197,068 tonnes and zinc down 50 percent at 48,135 tonnes.
Underlining concerns of tight supply, one entity held 50-79 percent of LME copper warrants and one entity controlled 50-79 percent of LME zinc warrants.
Aluminium ended up 1.1 percent at $2,094 a tonne, lead closed 0.4 percent higher at $2,153, tin gained 0.5 percent to $20,025 and nickel finished unchanged at $13,860 a tonne.