SINGAPORE, March 8 (Reuters) – London copper prices lost ground for a third consecutive session on Friday with the market set for a weekly fall, as rising inventories and a drop in the premium for directly available metal signalled easing supply squeeze.

Asian stocks shuddered lower on Friday after shockingly weak export data from China heightened market fears about a global economic slowdown, a day after European policymakers slashed growth forecasts for the bloc.

COPPER: Three-month copper on the London Metal Exchange slid 0.4 percent to $6,398 a tonne 0706 GMT, on track for a weekly drop of 1.2 percent.

SHANGHAI: The most-traded copper contract on the Shanghai Futures Exchange closed down 0.7 percent at 49,040 yuan ($7,295.99)a tonne.

STOCKS: Inventories in LME-registered warehouses rose to 120,075 tonnes from 116,872 tonnes on Wednesday, the lowest since 2008. MCUSTX-TOTAL

TIGHTNESS: Still Jefferies research said the tightness in supplies is expected to continue.

UNDERSUPPLIED: “Based on our supply and demand forecasts, we expect the copper market to be undersupplied for the foreseeable future,” it said in a note.

MINES: “The industry has almost no ability to respond to tighter markets as new mines take years to bring on line and most existing mines are already operating at full capacity.”

IMPORTS: China’s unwrought copper imports fell year-on-year in February to their lowest in 11 months, while copper concentrate imports rose to tie the all-time monthly record, signalling that the world’s top copper consumer is churning out more metal itself.

DEMAND: “Primary copper imports for first two months were slightly weak. However, this was offset by strong imports of copper concentrate,” ANZ said in a note.

“Overall, we calculate total copper units, primary copper and copper in concentrate, imported in China in Jan-Feb was up 12.4 percent year-on-year. This suggests the firmer underlying demand.”

TRADE WAR: Optimism over the ability of a potential U.S.-China trade deal and Chinese economic stimulus to push prices higher is fading.

CHINA BUDGET: China’s decision to increase its budget deficit ratio to 2.8 percent this year from 2.6 percent in 2018 is appropriate for the economy, and leaves room for policymakers to manoeuvre, Finance Minister Liu Kun said on Thursday.

STIMULUS: A proactive fiscal policy does not mean China will open the floodgates for stimulus, Liu said at a news conference on the sidelines of the annual parliamentary meeting in Beijing, reiterating past government pledges of restraint.