Copper dropped as base metals extended the worst weekly slump in almost two years, with a modest rate cut in China doing little to offset worries about demand in the world’s top commodities consumer.

Prices for the metal viewed as an economic bellwether fell for a sixth day, even after China increased support for the economy with surprise interest-rate cuts. The move came after a lack of short-term stimulus from a major Communist Party meeting disappointed investors last week.

A detailed document published on Sunday laid out the party’s plans to bolster the finances of China’s local governments, including by shifting more revenue from central coffers. But “without further stimulus measures,” there is little hope for short-term recovery in the copper-heavy property and construction sectors, according to Ewa Manthey, commodities strategist at ING Bank NV. 

“We expect copper and other industrial metals to decline further in the near term,” she said. That trend would reflect “a softer demand outlook in China.”

The LMEX Index, which tracks six base metals, plunged 5.6% in London last week. Copper extended its retreat from a record high in May amid alarm over weak Chinese demand and rising global inventories.

There were fresh signs of demand weakness in China as refined copper exports more than doubled in June, blowing past a previous record set in 2012. The rare surge in exports has helped drive global inventories higher, with stockpiles at London Metal Exchange global warehouses more than doubling over the past two months to the highest since September 2021.

Copper fell 1.3% to US$9,194 a tonne as of 2.06pm London time on the LME. All metals declined on the exchange.

  - Bloomberg