The most-active September copper contract on the Shanghai Futures Exchange fell 1.1 percent to close at 53,740 yuan ($8,400) a tonne on Tuesday, after rising 2.5 percent in the previous session. The ShFE front-month contract has been trading at a premium over the third-month contract since May 9, as prices have been below the expectation of many stockholders, who have been reluctant to sell.
"Volumes of draw downs from Shanghai's bonded warehouses are still low, but have increased from earlier months thanks to an improved LME-ShFE arbitrage," said a Qingdao-based trader.