Copper sinks to 3-week low as dollar firms, LME stocks rise

Copper extended losses on Monday, sinking to a three-week low as an increase in London Metal Exchange inventories eased tightness and a stronger dollar put further pressure on industrial metals prices after last week's selloff on U.S. tariff uncertainty. Benchmark three-month LME copper was down by 1.2% at $14,065 a metric ton in official open outcry activity.It hit a session low of $14,018.50, the lowest since August 20 and already down 5.9% from the record high it struck last Thursday. "Copper has led the decline and now looks to be challenging recent lows, extending the cautious tone following the first weekly loss since June," Neil Welsh, head of metals at Britannia Global Markets, wrote in a note, adding that renewed concern over tighter U.S. monetary policy was weighing on risk appetite. A stronger dollar makes greenback-denominated metals for expensive for investors using other currencies, while interest rate hikes are usually negative for economic growth. Copper sold off sharply last Thursday after Reuters reported that the White House had yet to decide whether to impose tariffs on refined copper imports, prompting the arbitrage to ship metal to the U.S. COMEX exchange to shrink. The drop was enough to end a run of 58 straight daily increases in COMEX copper stocks stretching back to mid-June as they dipped slightly to 767,504 short tons, or 696,268 metric tons, on Thursday. LME copper inventories meanwhile increased thanks to 9,600 tons of inflows, of which 4,550 tons were in warehouses in Italy. The cash LME copper contract last traded at a $36 a ton discount to the three-month forward , widening from a roughly $10 discount on Friday, signalling easing near-term tightness. Sentiment in metals was weak. Zinc fell 1.9% to $3,807, also touching a three-week low, while lead lost 1% to $1,873, hitting its weakest since August 3. Nickel shed 0.5% to $16,380, notching a two-month low, while tin fell 2% to $52,300, touching its lowest since July 17. Aluminium was the sole gainer, edging up 0.1% to $3,256.