London metals futures pared early gains while Shanghai prices fell as much as 5 percent on Thursday as worries about the parlous state of the world economy weighed on sentiment after a start-of-the-year rally.
Zinc was hardest hit, falling by its 5 percent daily limit in Shanghai, after an 8 percent slide in London, and copper also slipped after a substantial rise in LME stocks to a five-year high and record refined Chinese imports in December.
Shanghai copper fell as much as 1,270 yuan, or 4.7 percent, to 25,950 yuan during the morning session, only 70 yuan above its daily downside limit, but later recovered some of those losses to stand at 26,420 yuan ($3,865) at the daily close. LME copper reversed an early 2 percent rally to trade $5 higher at $3,220 by 0700 GMT.
Shanghai April zinc sank 530 yuan to 10,045 yuan ($1,468) a tonne from Wednesday's settlement during the morning session, after London Metal Exchange futures fell $100 overnight when stocks of the metal jumped 11,775 tonnes to 288,300, their highest in almost three years. Aluminium futures in Shanghai closed down 30 yuan at 11,375 yuan, chasing a fall of 4.6 percent in London.