SINGAPORE: London copper futures turned negative on Thursday after data showed factory activity in China, the world's top metals consumer, shrank for a fifth month.
Three-month copper on the London Metal Exchange had dropped 0.85 percent to $8,383.50 a tonne by 0620 GMT.
Copper was falling towards 11-day lows of $8,345 a tonne touched on Tuesday, when sentiment took a hit after top miner BHP Billiton flagged China growth concerns by warning of flattening iron ore demand from the world's second-largest economy.
The most-traded June copper contract on the Shanghai Futures Exchange dropped 1 percent to 59,790 yuan ($9,500) a tonne.
China's manufacturing sector activity shrank in March with the overall rate of contraction accelerating and new orders sinking to a four-month low, the HSBC flash purchasing managers index showed on Thursday.
"This is in line with the continued moderation story, but I don't think it signifies a more noticeable slowdown at this juncture," said Thomas Lam, an economist at DMG & Partners Securities in Singapore
"We are still holding on to our call that there will be some moderation in the first half of the year for the Chinese economy, followed by stabilisation and a slight pickup by the second half of the year."
China is the world's top metals consumer, and accounts for 40 percent of refined copper demand.
The final reading of the HSBC PMI for March is due on April 1.
Sentiment towards metals has been tarnished by a longer than expected period of sluggish demand since China's Lunar New Year in late January.
Traders said prices may come under renewed pressure as Europe opens and market participants cut their exposure to metals, given the latest figures.
"We might get a pop back higher but I think London will look at that data and sell," a Singapore-based trader said.
In terms of fundamentals, Chinese trade data this week showed copper imports in February remained strong, in part as the metal is used as collateral for cheaper funding, but this may lead to lower imports ahead, Macquarie said in a research note.
"(We) expect that due to sufficient copper availability on the ground in China we will see net imports of copper decline in March," Macquarie said in a research note.
China's inflows of refined copper rose 12 percent month-on-month in February to hit the third-highest level ever on delayed shipments from the holiday month of January and as buyers stocked up on expectations of rising demand during the peak March-May consumption season.