Aluminium and zinc fell to one-week lows, while lead tumbled to its lowest in nearly six weeks as the euro hit five-month lows against the dollar as concerns over Greece's debt triggered broad selling although analysts said growth data from China later this week should help restore the bullish sentiment.
Benchmark copper on the London Metal Exchange ended the day at $7,375 a tonne from $7,545 a tonne at the close on Tuesday. The metal used in power and construction hit $7,345, its lowest since January 13. On Wednesday, Chinese authorities ordered some major banks to curb their lending for the rest of this month. Last week, the country raised bank reserve requirements for the first time since June 2008.
"The market would treat any signs of tightening in China as a negative development," said analyst Carl Firman at Virtual Metals. "Dollar's also strengthening which is also negative for the prices," he said. Stocks of copper in London Metal Exchange warehouses at 526,650 tonnes are more than double the levels seen in the middle of July and the highest in 10 months.
Aluminium inventories at above 4.62 million tonnes are near record highs. But the aluminium market is focused on financing deals - where banks buy material now and sell it forward, generating a return that far surpasses money market interest rates.
Aluminium, which is used in transport and packaging, was at $2,267 a tonne from $2,293 on Tuesday, battery material lead was at $2,295 from $2,425 and stainless steel ingredient nickel at $18,805 from $19,200. Zinc, used to galvanise steel, was at $2,444 a tonne from $2,503 and soldering material tin was at $17,775 from Tuesday's last bid at $17,975.