Shanghai closed down 1.3 percent to $12,480 a tonne on Tuesday with prices retreating from a two-month peak on concerns over Chinese demand in the second half of the year. "We saw a turnaround in sentiment but the consensus is still very bearish on Chinese copper demand," said Chris Wu, copper analyst at CRU. "The idea is that demand is going to weaken in the second half, particularly in the third quarter, mainly due to seasonal reasons and because of heavy rains and flooding which are not good for construction."
China accounts for nearly half of global copper consumption, estimated at around 22 million tonnes this year. Expectations of stimulus measures had been driving prices higher. Chinese shares rallied on Monday on higher commodity prices and hopes for more action to stimulate the economy after data on Friday showed manufacturing growth stalled in June.
Outside China, stimulus hopes could be stoked this week with the Bank of England publishing its quarterly financial stability report on Tuesday and the minutes of the US Federal Reserve's June monetary policy meeting due to be released on Wednesday.