LONDON, Oct 3 (Reuters) - Copper prices fell to four-month lows on Tuesday as expectations of further rises in exchange inventories and the soaring dollar reinforced concerns about demand for industrial metals.
Benchmark copper on the London Metal Exchange (LME) was down 0.2% at $8,035 a metric ton by 1123 GMT. Prices of the metal used widely in the power and construction industries earlier fell to $7.956.5 a ton, the lowest since May 26.
Stocks of copper in LME registered warehouses
A Europe-based trader said the physical copper market was subdued. "I would not be surprised even if more copper would be delivered onto LME."
This, he said, was despite the closure of Boliden's Ronnskar smelter in June which would normally have meant consumers looking for copper in the physical market.
Expectations of fresh copper deliveries to LME warehouses
have seen the discount or contango for the cash over the
three-month copper
Also putting pressure on industrial metals prices was the stronger U.S. currency, which when it rises makes dollar-priced metals more expensive for holders of other currencies, subduing demand and weighing on prices.
This relationship is used to generate buy and sell signals by funds who trade using numerical models.
Elsewhere, three-month zinc retreated from the near-five-month high hit on Monday as the market factored in increasing supplies of the metal used to galvanise steel and mounting stocks. It was down 2% at $2,545 a ton.
Combined zinc inventories in LME
In other metals, aluminium retreated 1.4% to $2,289, lead was down 0.9% at $2,126, tin rose 0.9% to $23,700 and nickel slipped 0,1% tp $18,730 a ton.
(Reporting by Julian Luk; Editing by William Maclean)