Investors dumped industrial metals on Tuesday after data showed China’s imports and exports fell much faster than expected in July, threatening growth prospects for the world’s second-biggest economy.
“With the worse-than-expected trade data, risk aversion is back, so metals are giving back gains they had a bit earlier,” said Amelia Xiao Fu, head of commodity market strategy at Bank of China. International in London.
A week ago, copper hit its highest level in more than a month on stimulus hopes in China.
“Tomorrow (Wednesday) we have the Chinese CPI numbers, which could show some signs of deflation, so they could weigh on sentiment again,” Fu added.
The data also showed that passenger car sales in China fell for the second straight month in July, while imports of raw copper and copper products fell 2.7% year-on-year.
The strength of the dollar index also weighed on the market, after a US Federal Reserve official said further interest rate hikes were likely. A stronger dollar makes commodities priced in the US currency more expensive for buyers using other currencies.
Among other metals, aluminum was down 1.2% at $2,202 a metric ton; zinc fell 1.4% to $2,461; Lead was down 0.7% at $2,123.50; nickel was down 1% at $20,895; and tin was down 1.8% at $27,250.