Copper falls on dollar strength ahead of US payrolls

Copper prices fell against a stronger dollar on Tuesday, ahead of key US employment data to be reported later for the week and amid lingering concerns about the fate of Evergrande.

At 1120 GMT, three-month copper on the London Metal Exchange (LME) was down 1.7% at $ 9,090 a tonne.

The dollar was approaching a one-year high, making raw materials more expensive for holders of other currencies, ahead of the release on Friday of the US non-farm payrolls, which is expected to support an early withdrawal of stimulus delivered by the Reserve Federal.

Concerns about defaults by Chinese real estate developers and the potential impact on demand for metals grew on Tuesday, amid further credit rating downgrades and uncertainty about the fate of Evergrande.

There were bearish macroeconomic factors that dragged down metal prices, including Evergrande, and the threat of stagflation due to energy price increases, said Alastair Munro of brokerage Marex.

He added that the decrease in inventories in operator warehouses was a positive factor.

Copper stocks under guarantee in LME-registered warehouses that are available to the market have more than halved since mid-August to 100,250 tonnes.

Meanwhile, in deposits monitored by the Shanghai Futures Exchange, copper stocks are at their lowest level since 2009 at 43,525 tonnes.