LONDON: Copper prices reached a four-week high on Monday, helped by a weaker dollar, but prices fell back later in the day as data revealed a global slowdown in manufacturing activity, a key source of metals demand.

Benchmark copper on the London Metal Exchange (LME) was down 1.3% at $7,818 a tonne at 1616 GMT after touching $7,970 for its highest since July 5.

Prices of the metal used in power and construction tumbled from a record high of $10,845 in March as rapid increases to interest rates combined with coronavirus lockdowns in China to stifle economic growth. But copper has risen from a low of $6,955 in mid-July on hopes the US Federal Reserve’s monetary tightening will be less aggressive than previously expected and that China will stimulate its economy.

Global touched seven-week highs on Monday and the dollar fell to a one-month low, helping dollar-priced metals by making them cheaper for buyers with other currencies.

“It’s looking encouraging (for copper). If the Fed can slow down on rate increases and China does what it has promised, it’s looking better and better,” said independent analyst Robin Bhar, adding that stocks of metal are low and supply constrained.

Surveys showed weak factory activity across the United States, Europe and Asia in July, adding to fears of recession. China, the biggest consumer, also faces a slump in the property sector.

Speculators in copper on the COMEX futures exchange are still betting that prices will fall.

However, Chinese officials have promised to stimulate growth and signs of improving demand are appearing.

Stockpiles in Shanghai Futures Exchange (ShFE) warehouses, at 37,025 tonnes, are close to December’s 12-year low of 27,171 tonnes.

LME aluminium was down 2% at $2,438 a tonne, zinc was up 0.7% at $3,332, nickel rose 0.1% to $23,650, lead gained 0.8% to $2,051 and tin was 1% lower at $24,800.