Three-month copper on the London Metal Exchange advanced 0.5% to $8,822 a tonne by 0708 GMT, while the most-traded April copper contract on the Shanghai Futures Exchange ended down 1.9% at 65,330 yuan a tonne.
Copper is pegged by analysts to benefit from a global economic recovery and rising demand from green investments, but possible policy tightening in China could put a lid on a sustained economic recovery and inflows into financial markets.
“Metals are hostage to large moves in the macro space, with a rotation going on into cyclical assets, but ...fears of asset bubbles have slammed Chinese equity markets hard,” said commodities broker Anna Stablum of Marex Spectron.
Spectron added that the upcoming sessions are likely to be volatile.
“We might start to see some downstream copper users be more willing to come in and purchase metal after the latest price drop, but most likely we will need to see prices stabilise first. The rapid increase we saw in February did deter physical users from buying.”
The head of China’s base metals body warned of the risk of speculators driving prices away from fundamentals, adding that sharp fluctuations would “do more harm than good”. FUNDAMENTALS
* Peru’s copper output could hit a record 2.5 million tonnes this year, its mining minister said.
* Shanghai Dalu Futures cut its long position on the May Shanghai copper contract on Tuesday by almost 25%.
* LME zinc fell 0.6% to $2,762 a tonne, ShFE nickel dropped 2.1% to 119,770 yuan a tonne and ShFE lead declined 1.8% to 14,635 yuan a tonne.
* For the top stories in metals and other news, click or (Reporting by Mai Nguyen; Editing by Rashmi Aich and Aditya Soni)