Shanghai copper futures fell on Monday amid bearish sentiment, as traders braced for a release of copper reserves held by the State Reserves Bureau.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose by 14,485 tonnes last week, according to data released on Friday.
Some traders interpreted the jump as a sign that the bureau's copper releases would pressure spot markets in November and December.
"We think the SRB was responding to the National Development and Reform Commission's indications last week that copper prices are too high, and so it's releasing metal to push them down, a Shanghai-based broker said.
"Everyone thinks the warehouse stocks will rise again this week, by at least as much as last week."
Some traders think the reserve bureau could release as much as 30,000-50,000 tonnes of copper, while others note that previous release had tended to come in batches of 10,000-20,000 tonnes.
On Monday, the most active January contract ended at 36,330 yuan ($4,494), down 290 yuan from Friday's close, although some buying support was seen throughout the day every time the contract dipped too far.
Volume rose to 88,682 lots, from 71,104 lots on Friday. Spot copper inched up 20 yuan from Friday, to 37,800-38,200 yuan. Chinese traders are cautious this week as the London Metal Exchange holds its annual convention, known as LME week.
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