METALS-Copper falls more than 3%, on course for worst month since June 2022

By Ashitha Shivaprasad

April 30 (Reuters) - Benchmark copper prices fell more than 3% on Wednesday, on track to register the biggest monthly decline since June 2022 against a backdrop of weak data from top metals consumer China and lingering trade uncertainty.

Benchmark copper CMCU3 on the London Metal Exchange (LME) slid 3.4% to $9,123 a metric ton by 1600 GMT. Prices were on course for a 6% decline in April.

The U.S. Comex copper contract HGc3 slumped 5.5% to $4.61 per lb. The sharper decline in Comex was due to investors liquidating arbitrage positions that had been placed in expectation of U.S. tariffs on copper, a trader said.

Data on Wednesday showed that Chinese factory activity contracted at the fastest pace in 16 months in April, keeping alive calls for further stimulus.

"Copper is currently being held back by macroeconomic uncertainty," said SP Angel analyst John Meyer.

"While Trump tariffs threaten to create a mini-recession in the West, we feel that new stimulus in China and much of Asia will continue to keep manufacturers going and drive growth."

Weighing on financial markets was a lack of progress in de-escalating the U.S.-China trade conflict.

Despite claims from U.S. officials that talks are ongoing, China has denied any active discussions. U.S. Treasury Secretary Scott Bessent said on Tuesday that it will become evident to Beijing that Chinese tariffs are not sustainable for the world's second-largest economy.

Adding to the disquiet was data showing that the U.S. economy contracted in the first quarter.

The dollar strengthened =USD, making dollar-priced metals costlier for buyers using other currencies. USD/

Keeping a floor under copper prices was another huge drop in inventories CU-STX-SGH in warehouses monitored by the Shanghai Futures Exchange (SHFE), sliding by 23.5% from last Friday to the lowest since January 17 at 89,307 tons. Inventories tumbled by almost a third last week.

The declines have been driven by copper diverted to the U.S. because of tight scrap supplies and tariff threats on U.S. imports.

"The shortage of scrap into China is a major issue, with a huge copper concentrate deficit causing Chinese smelters to reduce capacity," said Meyer.

In other metals, aluminium CMAL3 fell 2.6% to $2,400.50 a ton, zinc CMZN3 lost 2.3% to $2,589, lead CMPB3 gave up 0.9% to $1,959, tin CMSN3 shed 2.1% to $31,260 and nickel CMNI3 was down 1.1% at $14,375. All were on track for monthly declines.

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