PHOTO
Copper sheets are seen in a deposit inside Barrick's Zaldivar copper mine at the foothills of the Antofagasta region
Copper prices extended losses on Tuesday as speculators remained pessimistic about global growth and weak demand in China, while zinc slumped after a jump in inventories highlighted oversupply.
Three-month copper on the London Metal Exchange (LME) eased 1% to $8,798 per metric ton by 1000 GMT after dropping 1.8% on Monday and touching a 4-1/2-month low.
LME copper has slumped 21% from a record high of more than $11,100 scaled in May.
Global equity markets rallied on Tuesday after plunging a day earlier, but investors in metals markets were wary.
"There seems to be a bit of steadiness overnight, but I think the market is still pretty fearful of a big slowdown, no growth, and we haven't really seen demand in China," said Robert Montefusco at Sucden Financial.
"There's been a lot of abandonment of long positions, a lot of CTA selling, funds and specs selling," he added, referring to Commodity Trade Advisor (CTA) investment funds that are largely driven by computer programs.
The most-traded September copper contract on the Shanghai Futures Exchange tumbled to its lowest since March 13, closing down 3% at 70,850 yuan.
Although weak U.S. data last week fuelled worries about a potential recession, expected interest rate cuts could provide support.
Another bright spot is that the premium to import copper into China rose to $48 a ton on Monday, the highest since March 18.
Zinc was the biggest decliner on the LME, easing 2.1% to $2,579.50 after LME data on Tuesday showed that inventories surged by 8% to 247,825 tons, having more than tripled over the past nine months .
LME zinc is also the worst performer on the LME over the past month, shedding 14%.
Analysts expect a market surplus of zinc this year of 19,000 tons, jumping to 229,800 tons in 2025, according to a consensus forecast in a Reuters poll.
Among other metals, LME aluminium edged up 0.2% to $2,255 a ton, lead climbed 1.2% to $1,953.50 after tumbling 4.6% in the previous session, while nickel lost 0.4% to $16,210 and tin dipped 0.1% to $29,450.
($1 = 7.1478 yuan)
(Reporting by Eric Onstad; Additional reporting by Mai Nguyen in Hanoi; Editing by David Holmes)