(Bloomberg) -- Copper slipped amid a broad selloff across risk assets as the deepening war in the Middle East stoked concerns about inflation and global growth.

Declines in equities and bonds accelerated after CBS reported the US is preparing to deploy ground forces into Iran. Copper fell 1.8% to settle at $11,929.50 a metric ton in London, ending the week with a 6.7% loss, the steepest in almost a year.

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Higher prices for oil and gas will hurt manufacturing and economic activity worldwide, while fueling inflation that forces central banks to take a more hawkish stance on interest rates. Traders — who are now pricing in a 50% chance of a Federal Reserve hike by October — are closely monitoring crude prices, which were headed for another weekly surge.

Commodities markets have been roiled by disruptions to supply out of the Persian Gulf, with the effective halt of the Strait of Hormuz. Iranian officials have become reluctant to even discuss reopening the Strait as they focus on surviving the US-Israeli onslaught, according to a person involved in direct, high-level contacts with Tehran. Earlier the Wall Street Journal reported the Pentagon is deploying three warships and thousands of additional Marines.

Copper’s retreat this month is aiding Chinese demand, however, as fabricators returning after the Lunar New Year holidays buy the metal. Inventories in Shanghai and Guangdong have fallen about 8% from a six-year high on March 9, according to Shanghai Metals Market.

“Tentative signals of China buying the copper price dip continue to emerge,” analysts at BMO Capital Markets wrote in a note.

Falling stockpiles, narrowing discounts for spot metal and evidence that processors are using more of their capacity indicate demand is improving in the world’s biggest copper consumer, they said.

Copper’s drop on the London Metal Exchange has outpaced declines on the Shanghai Futures Exchange, opening a window for traders to import the metal into China, said Levi Xiao, a trader at Wooray Commodities Pte. Ltd. Imports are expected to pick up for copper arriving in April and May, he said.

Aluminum slipped 1.1% to $3,215. Other base metals were mixed with tin down 0.6% and nickel up 0.2%.

--With assistance from Jack Ryan.

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