Some Shanghai copper futures contracts fell their three percent limit in trade on Tuesday under pressure from an overnight fall on the London Metal Exchange, traders said.
The April 2004 contract had dropped 800 yuan to 27,360 yuan ($3,306).
"Overnight LME losses strengthened expectations on the Chinese market that copper prices would undergo a period of correction after its recent strong rally," said a Shanghai trader.
LME three-month copper ended ring trading at $2,860 a tonne on Monday, plunging $68, or 2.32 percent, from Friday's kerb close of $2,928, caught in a technical corrective phase, traders said.
Chinese traders had warned of increasing investment risks after copper prices surged both on domestic and overseas markets since the start of this year.
Shanghai's most active September contract, for instance, had surged 20 percent by Monday's close even after a powerful correction set in late last week.
It fell 560 yuan to 27,610 yuan on Tuesday.
Traders said copper prices were likely to see further falls in the near term, but longer-term market prospects were still promising as a global economic recovery and strong demand from China underlined worries about a lack of supplies.
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