The copper price slumped almost 3% on Tuesday, dropping to within shouting distance of 3-year lows on news US monetary policy may tighten sooner than thought and fresh evidence of a slowdown in China.

In New York trade spot copper changed hands at $3.04 a pound, down 15.5% this year and at levels last seen in July 2010.

While the looming end to US central bank stimulus sent precious metals price plummeting, economic news from China – responsible for 42% of total global copper demand of 20.5 million tonnes – continues to get grimmer.

The country's purchasing managers' index (PMI) released Thursday showed a decline in manufacturing activity due to decreases in both production and demand.

Given its widespread use in transportation, manufacturing and construction copper is sensitive to any economic slowdown, but market specific factors are also putting pressure on the price.

Safety-related shutdowns at major US and Indonesian copper producers have cut supply short-term, but a slew of new mines in Indonesia, Peru and Mongolia coming on stream and expansion at existing mines in number one producer Chile this year will result in a big jump in mine output. The marginal costs of most producers are in the $6,000 – $7,000 a tonne range or roughly $2.75 – $3.15 a pound.