“There is a sense that this move is a little bit China-related,” Ric Spooner, a chief market strategist at CMC Markets Asia Pacific Pty, said from Sydney. “There has been a trend towards destocking of inventory in recent times and that appears to be creating downward momentum, particularly in copper.”

Metals are being battered by a stronger dollar. The greenback is buoyed by expectations for the first U.S. interest-rate increase since 2006 in December and by heightened geopolitical risk after the terror attacks in Paris. The Bloomberg Dollar Spot Index rose 0.2 percent on Tuesday, making assets denominated in the currency more expensive.

Eoin Treacy's view

We saw a lot of evidence of businesses under pressure when in China earlier this month. The low oil price is a benefit for China’s energy consumers but for its exporters the loss of Russian and Middle Eastern customers is a headache and is contributing to the economic slowdown. The domestic market continues to transition from an infrastructure investment led model to consumerism. This means that while demand is likely to continue to trend higher it will do so at a considerably slower pace. This is weighing on resources companies. 

The other side of that argument is that the challenges facing the Chinese economy mean easier fiscal and monetary conditions will be required if the government is to achieve its growth targets. That is likely to continue to be a headwind for the Yuan but may act as a support for the resources sector. 

Copper remains in a medium-term downtrend characterised by a progression of lower rally highs. However it is short-term oversold following four consecutive weeks to the downside so there is room for steadying and potential for a reversionary rally has increased. 

Among copper miners the majority share the metal’s medium-term downtrend. Australian OZ Minerals is an exception not least because its resource base is confined to a small number of high potential properties. The share remains in an almost two-year base and found support this week in the region of A$4. A sustained move above A$5 would suggest a return to demand dominance beyond the short term.