LONDON: Copper prices fell on Thursday as rising coronavirus infections and weak economic data in China deepened concerns of weak demand from the biggest metals-consuming country.

Adding pressure was a rising dollar, which made dollar-priced metals costlier for buyers with other currencies, and declines on global equities markets ahead of U.S. inflation data expected at 1330 GMT.

Benchmark copper on the London Metal Exchange (LME) was down 0.9% at $8,035 a tonne at 1154 GMT.

The metal used in power and construction rallied sharply last week on hopes that China will dispense with a zero-COVID policy that has stifled economic activity.

But prices are still down more than 25% from a high in March due to slowing growth in China and elsewhere.

A state news agency said Chinese authorities should take a more targeted approach to tackle COVID outbreaks, but the country is again grappling with a surge of infections and Chinese stock markets fell.

Millions of residents of China’s southern manufacturing hub of Guangzhou are being required to take COVID-19 tests.

Chinese demand fears haunt copper market

“What’s been holding back the Chinese economy will continue,” said WisdomTree analyst Nitesh Shah, though he added that copper prices were unlikely to fall much further because of high infrastructure spending around the world.

Data showed that in October factory gate prices dropped and auto sales rose at their slowest pace in five months. Meanwhile, analysts expected new yuan loans to have slumped in October and China’s usual year-end export surge is in doubt.

Despite a fall in copper inventories in LME-registered warehouses, the premium for cash copper over the three-month LME contract has fallen to around $10 a tonne from more than $100 last month, suggesting ample supply.

LME aluminium was down 1.6% at $2,283 a tonne, zinc fell 1.5% to $2,811.50, nickel dipped 0.5% to $24,560, lead slipped 1.9% to $2,038 and tin was down 0.7% at $19,675.