London Metal Exchange (LME) copper eased in Tuesday's midsession weighed by technical selling and a softer market in Asia following a move by the Shanghai Futures Exchange to raise margins, traders said.
"Asia came down after Shanghai upped its margins," one trader said.
Overnight, copper futures fell the daily limit in Shanghai amid a rise in daily margins and speculation that China might re-value the yuan.
By the end of the second rings three months copper had fallen to $3,058 a tonne, down from $3,140 at Monday's kerb close.
"Copper got pushed down in part thanks to the margin changes which prompted the long liquidation," a second trader said.
Another trader said the overnight fall in what was supposed to be a bull market was a bit worrying.
However the second trader said the move was a correction and was to be expected.
"I don't trust the market at these levels, but from a technical perspective it looks constructive, pointing towards $3,300," he said.
Copper hit $3,177.50 a tonne on Monday, its highest since January 1989, with global LME inventories nearing historical lows and strikes adding to supply concerns.
Traders said the market should find support around $3,035/40.
Tightness was apparent in the market with TOM/next carrying a $17 backwardation and the cash-to-three-months spread a wide $149/159 backwardation.
Aluminium was dealt a blow as LME warehouse stocks rose 4,950 tonnes and prices fell to $1,808, down from $1,855.
Zinc eased to $1,150 from $1,186, while lead was untraded, indicated $7 lower at $959/960.
Nickel slipped to $15,755, against $16,150, while tin dropped to $9,150 from $9,240.
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