Copper fell on Tuesday as worries over China's economic growth and the outlook for demand resurfaced, though losses were limited by supply disruptions. China's annual consumer inflation hit a five-year low in January, underscoring persistent economic weakness after the country's trade performance slumped in January. The data adds pressure on policymakers to support growth, though China's central bank said it will fine-tune policy to head off a slowdown but avoid overstimulating the economy.
Data on Monday showed China's imports tumbled 19.9 percent in January, far worse than expected. However, copper has lost 11 percent of its value this year after a 14 percent drop last year, leading some analysts to say that the bad news is probably priced in for now.
"China is weak and weakening at the moment, (but) at these prices you are well into the marginal cost of production, so I think the downside on copper is fairly limited," said William Adams, head of research at Fast Markets. Three-month copper on the London Metal Exchange (LME) closed 1.4 percent lower at $5,595 a tonne. Brent crude prices also came under pressure for the first time in four sessions, eroding a plank of support for metals.
Still, supply disruptions could yet support prices. BHP Billiton suspended most staff operations at its Olympic Dam copper mine after a fatality on Tuesday. Chile's Collahuasi mine, meanwhile, will operate at less than half capacity until Friday at least because of maintenance work. In other metals, tin ended 0.1 percent lower at $18,200, having earlier hit $17,950, its lowest in 2-1/2 years. Refined tin shipments from top exporter Indonesia were 6,770.24 tonnes last month, down 34 percent from December, a trade ministry official said on Tuesday.
Lead was down 1 percent at $1,832 a tonne. "(Lead) market fundamentals largely appear to be looking positive. SHFE and LME inventories are exhibiting sustained draw trends. We project 1Q15 lead prices to average $1,880 per tonne," Citi said in a note. Zinc ended 2.1 percent lower at $2,115, nickel shed 2.3 percent to $14,805 and aluminium closed 2.2 percent lower at $1,836.