Nickel, much of which goes into making stainless steel, also fell sharply as Chinese iron ore and steel futures tumbled and a rise in stocks pointed to ample supply.
Copper demand is, however, less dependent on Chinese economic stimulus measures than steel, said Julius Baer analyst Carsten Menke. "This is a sentiment-driven correction rather than a fundamentals-driven correction," he said.
LME COPPER: Copper on the London Metal Exchange was down 0.6 percent at $5,680 a tonne in official rings, having fallen to $5,635.50 earlier in the session. "Expect rallies into $5,690-5,710 to be sold first time around," brokers Marex Spectron said in a note.
COPPER STOCKS: Traders said prices were supported by a 18,825-tonne fall in on-warrant copper stocks available to the market at LME-registered warehouses. On-warrant stocks have declined by 28 percent to 176,225 tonnes from a high of 243,300 tonnes on May 4.
COPPER TECHNICALS: Technical support was around $5,635-$5,660. "It needs to close below the $5,620 area to look lower again," said a copper trader.
CHINA DOWNGRADE: Moody's said it expected the financial strength of China's economy to erode in the coming years as growth slows and debt continues to rise. Global markets were muted.
CHINA STEEL: Chinese steel futures fell and iron ore tumbled 7 percent following the downgrade and on concerns over ample supply.
US PROPERTY: New US single-family home sales tumbled from near a 9-1/2-year high in April, but the housing recovery likely remains intact amid a tightening labour market.
LME NICKEL: Lower Chinese steel and iron ore prices and a surge in Chinese nickel ore imports from the Philippines drove LME nickel down 2.1 percent to $9,150 a tonne.
NICKEL STOCKS: Traders said a 4,128-tonne rise in on-warrant nickel at LME-registered warehouses to 269,808 tonnes helped drive prices down by signalling good supply.
NICKEL TECHNICALS: "Support at $9,150 is holding for now at least and has unearthed some short covering, rallies are to be sold today though," said Marex Spectron.
PRICES: Lead was down 0.1 percent to $2,094 a tonne, zinc was 0.9 percent lower at $2,635, tin lost 0.9 percent to $20,325 and aluminium gained 0.2 percent to $1,946.