Demand fears return to haunt copper prices

LONDON, July 19 (Reuters): Copper prices fell on Tuesday as worries about demand in top consumer China and elsewhere due to a slowdown in growth were reinforced by rising inventories, while a lower dollar provided some support.

Benchmark copper CMCU3 on the London Metal Exchange (LME) was down 1.3% at $7,328 a tonne at 1104 GMT, a drop of more than 30% since a record high at $10,845 a tonne in March.

Prices staged a recovery on Monday as traders pared bets on how aggressive the U.S. Federal Reserve would be in raising rates later this month.

"Individual metals aren't really being driven by their own fundamentals, macro factors are driving metals at the moment," said Caroline Bain, chief commodities economist at Capital Economics.

"The growth outlook has deteriorated ... prices could fall a little further, there is momentum there, but they will stabilise fairly shortly at these lower levels."

Chinese cities have lifted COVID restrictions. But Japanese Bank Nomura said 41 Chinese cities were currently implementing full or partial lockdowns or some kind of district-based control measures, affecting 22.8% of the country's gross domestic product.

"China lockdowns aren't over yet, neither are the headwinds to demand," a copper trader said. "More interest rate rises are expected ... I can't see many positives at this stage.