LONDON: Copper prices retreated on Thursday, hit by tense geopolitics, a strong dollar and uncertainty about how soon China’s stimulus measures would affect physical demand.

Three-month copper on the London Metal Exchange dropped 1.5% to $9,934 a metric ton in official open-outcry trading, having gained 1.1% in the previous session.

Conflict raged in the Middle East as Israel continued to bomb Lebanon and the president of Iran was defiant after his country fired missiles into Israel. “There’s a little nervousness creeping into the market because of all the things that are going on in the world,” said Dan Smith, head of research at Amalgamated Metal Trading.

“But I think this is a temporary pause. I think investor sentiment will dominate over the next two to three months. There’s more to go in terms of buying into China’s big bazooka.”

In recent weeks, top metals consumer China has taken action to boost economic growth, including cutting interest rates, injecting liquidity into banks and easing home purchase restrictions. Others, however, were more wary about the impact from China.

“The policy stimulus effect to copper in the short term is almost finished. We saw the stock accumulation in China for the first time in September,” said Matt Huang, analyst at broker BANDS Financial. He was referring to a rise this week in copper inventories in warehouses tracked by the Shanghai Futures Exchange, the first since the week starting July 1.

Nickel was the only LME metal in positive territory, rising 0.3% to $18,200 a ton on short-covering after Madagascar nickel and cobalt miner Ambatovy shut down an ore pipeline. LME aluminium eased 1.3% to $2,643 a ton, pulling back from a four-month peak of $2,694 earlier in the session.

On Wednesday the LME said it was monitoring tightness in the aluminium market. Among other metals, zinc fell 0.4% to $3,160, lead slipped 0.7% to $2,136 and tin was down 0.3% at $33,800.