Copper is spiraling lower as investors increasingly write off the prospects for a decisive economic recovery in China this year.

The metal has been under pressure as a raft of data in recent weeks has showed the post-virus rebound in China, which consumes around half the world’s copper, is stuttering. Unlike in previous slowdowns, Beijing is depriving metals of a safety net by not deploying any big-ticket spending on infrastructure or property.

“Metals markets have faced significant pressures after the disappointing April macro data from China, which have acted as a wake-up call to the weak reality on the ground,” Citigroup Inc. said a note.

There was more bearish news from China on Wednesday, with fresh fears over local-government debt that’s often used to fund infrastructure. Globally, copper’s demand weakness is evident in inventories held by the London Metal Exchange, which have almost doubled since mid-April.

Copper fell as much as 1.4% to $7,988 a ton on the LME and traded at $8,019.50 as of 1:46 p.m. in Shanghai. The metal is down around 11% this quarter.

While China is the main source of copper’s troubles, there isn’t much help coming from the US. The Federal Reserve’s aggressive monetary tightening campaign has undermined demand. Investors had been expecting a pause, but recent comments from officials suggest the central bank may have to keep raising rates.

Still Optimistic

Goldman Sachs Group Inc. — a notable bull on copper — said commodities prices would “come roaring back” should concerns over a global recession turn out to be misplaced. Copper will return to $10,000 a ton by this time next year, analysts including Nicholas Snowdon said in a note.

Read More: Key Copper Spread at Widest in Decades Shows Weakening Market

For now, a key spread is also signaling supply is running well ahead of demand. Copper’s spot price is at a $66 a ton discount to three-month futures on the LME. That’s the widest contango — when futures trade at a premium to the spot price — in data going back to 1994.

The risk of more copper supply is adding to the downward price pressure, said Jiang Hang, head of trading at Yonggang Resources Co. “Prices are going to head even lower.”

Steep price declines for other metals are also damaging sentiment toward copper, he said. “The plunge for other metals like zinc has gone far beyond market expectations, which is sending a really bad signal.”

Zinc dropped 1.9% to $2,328.50 a ton on the LME, taking its decline so far this quarter to around 20%. Aluminum was down 0.6%, falling for a third day.

--With assistance from Dylan Griffiths and Eddie Spence.