London copper slipped towards three-month lows on Monday after growth at China's factories stumbled to its weakest in nearly six years in August, fueling concerns over its metals demand.
As well as weakening growth in China's factories, growth in other key sectors also cooled, raising fears the world's second-largest economy may be at risk of a sharp slowdown unless Beijing takes fresh stimulus measures.
"It's going to be a messy day I think," said commodity analyst Daniel Hynes of ANZ in Sydney.
"I suspect the European and U.S. investors will probably take that data a little worse than those in Asia. Their optimism has been quite fragile over the past few weeks, so this will result in a few selling out pretty quick," he added.
Three-month copper on the London Metal Exchange slipped by 0.7 percent to $6,793.75 a tonne by 0146 GMT after closing flat in the previous session.
It earlier fell as far as $6,780.75, towards support at $6,734 a tonne which was the low from Sept. 11 and the weakest since June 20.
The most-traded November copper contract on the Shanghai Futures Exchange fell 0.4 percent to 48,230 yuan ($7,856) a tonne having earlier hit its weakest since June 23.
Losses were cushioned in Asian hours as traders raised bets that China's central bankers will embark on more stimulus to buttress the economy against a property led slowdown.
But further headwinds for commodities were coming from expectations that the U.S. may hike interest rates sooner than previously thought given a string of improving economic signals.
U.S. retail sales rose broadly in August and consumer sentiment hit a 14-month high in September, supporting expectations for sturdy economic growth in the third quarter.
BNP Paribas has shifted its expectations for the first U.S. rate rise to the second quarter of 2015 from the third quarter.
The expectations have weighed on commodities prices because industry will have to pay higher costs to obtain capital and because a stronger dollar makes commodities more expensive for holders of other currencies.
Investors have turned bearish copper. Hedge funds and money managers switched copper into a net short position for the first time since April, the Commodity Futures Trading Commission said on Friday.
Across other metals, more refined zinc is likely to be shipped from bonded warehouses in China to warehouses approved by the LME in Asia in the fourth quarter as tight credit crimps domestic demand, traders said, which is likely to temper a rally in LME zinc.
Three month zinc slipped by 0.2 percent to 2272.25 a tonne but is still up by more than 10 percent this year.