Shanghai Futures Exchange copper fell 1.8 percent to 51,840 yuan ($8,196) a tonne on Thursday and finished below the 200-day moving average, sending a "sell" signal to chart-following funds. The prices also buoyed by solid China import figures that bolstered optimism over the health of demand from the world's biggest metals user.
China's trade machine kicked up a gear in January after stumbling the previous month, with exports and imports both growing much more than expected, getting the economy off to a solid start to the year. However, with jitters in wider markets following an equity shakeout this week, and an approaching holiday in China set to crimp near-term metals demand, metals markets looked vulnerable, broker Kingdom Futures said in a report.
"The metals have started the day on ... a nervous footing and as the Chinese holiday approaches there could yet be another round of selling before the weekend." China's unwrought copper imports fell for a second straight month in January as winter restrictions on the construction sector and high domestic production rates continued to crimp demand for metal from overseas.
Traders were likely to import more copper cathode to China given uncertainty over smelter feed supply as new restrictions on China's scrap imports come into force, said analyst Dan Morgan at UBS in Sydney. "I think imports will be strong in the first half of the year."
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