Copper futures were on the defensive on Tuesday after tumbling more than 3 percent in London trade on heavy technical selling, but they found some support around lows on solid bargain-hunting.
Futures prices on the Shanghai Futures Exchange were put under strong selling pressure since early trade, dropping by nearly 2 percent following plunges on the London Metal Exchange and falls in other commodities markets.
Many fund operators and institutional investors were believed to be taking profits on the red metal and other industrial metals ahead of the end of the first quarter. Such selling may continue in the near term, although price falls could be limited based on bullish fundamentals.
"The market has been volatile recently and overall falls in commodities, including oil, dragged down copper," said Hiroyuki Katakana, a director at Barclays Capital Japan. "Prices will remain volatile for a while, but I don't think copper will fall repeatedly as the long-term trend for the metal is still considered to be bullish," Katakana said.
The key three-month LME copper contract was trading at $4,815/4,825 per tonne, down 1.1 percent from Monday's London kerb close of $4,870. But the key LME contract recovered on bargain hunting from a low of $4,798 reached in late London trade after the kerb close.
In Shanghai, the most heavily traded May copper contract finished the morning trade at 45,880 yuan a tonne, down 830 yuan or 1.8 percent from Monday's close of 46,710 yuan. It had moved in a range of 45,700 to 45,990 yuan.
Copper could come under further technical selling pressure as the key LME contract fell below closely watched chart levels the previous day. Three-month LME copper intensified downswing, particularly after breaking below the 30-day moving average around $4,874.
The most active May Shanghai aluminium contract ended the session at 19,670 yuan, down 1.3 percent from Monday's close of 19,680 yuan. It had moved in a range of 19,300 to 19,410 yuan.