Copper was set for its biggest monthly fall since November 2015 on Friday as weak Chinese factory data and a US threat to impose tariffs on Mexican goods fanned fears that trade disputes will damage the global economy and demand for metals.
Benchmark copper on the London Metal Exchange (LME) ended down 0.4 per cent at $US5,830 a tonne.
The metal used in power and construction has slipped nine per cent this month, its third straight monthly fall.
Most other industrial metals also fell in May, with zinc having its biggest monthly tumble since 2012.
“The fundamentals (for copper) are OK, it’s the expectations that demand will be further undermined by tariffs and recession fears hitting prices,” said Societe Generale analyst Robin Bhar, adding that copper was likely to target a January low of $US5,725.
China’s factory activity slumped in May to a deeper contraction than expected.
China is the world’s largest consumer of metals.
US President Donald Trump has threatened tariffs on all goods from Mexico, starting at five per cent and ratcheting higher, until illegal immigrants are stopped entering the United States.
China threatened to unveil an unprecedented hit-list of “unreliable” foreign firms – groups and individuals that harm the interests of Chinese companies.
European and US stocks tumbled and sovereign bonds surged.
Chinese stocks had the biggest monthly decline since October and oil suffered its steepest monthly drop in six months.
A small bright spot was Japan, where industrial output rebounded in April.
The US dollar dipped on Friday but was near two-year highs, making metals pricier for buyers with other currencies.
Supply side problems are likely to lead to a tighter copper market, supporting prices.
Top producer Codelco reported an 18 per cent year-on-year drop in its first-quarter copper output amid strike fears.
Spot prices for refining copper concentrate have fallen to their lowest in 6-1/2 years.
LME zinc finished 1.4 per cent lower at $US2,524 a tonne, down almost 11 per cent in May.
However, weak output from Chinese smelters is likely to persist longer than expected, keeping the market tight.
Benchmark tin did not trade in closing rings but was bid down 0.4 per cent at $US18,710.
It is down five per cent in May after falling eight per cent in April.
Stockpiles in LME-registered warehouses have more than quadrupled since early May and the premium for cash tin over three-month metal more than halved to $US125, suggesting a supply squeeze has eased.
LME aluminium ended up 0.7 per cent at $US1,795 a tonne and was roughly flat this month.
Lead closed down 0.1 per cent at $US1,805 and about six per cent lower this month.
Nickel was not included in closing rings but had slipped 1.1 per cent to $US12,020 in electronic trading.
It was broadly unchanged in May.