Benchmark copper on the London Metal Exchange ended down a touch at $6,898.5 a tonne from Wednesday's close at $6,901. The price had touched a three-year high of $6,970 this week, representing a gain of nearly 25 percent so far this year.
"The dollar has been a major tail wind. Chinese demand isn't bad, but it is being overestimated. Look at data on non-tradeable materials like cement, where demand growth is still low," said Liberum analyst Richard Knights.
"One influence has been the Chinese regulator pushing wealth management products towards commodities."
WEALTH: China said in June it will encourage wealth management firms to invest in commodity futures to promote its domestic derivatives industry and raise Chinese funds allocation to commodities.
DOLLAR: A lower US currency makes dollar-denominated metals cheaper for non-US firms, which could eventually boost demand. This relationship is used by funds to generate buy and sell signals using numerical models.
ECB: The dollar extended losses against the euro after the ECB reaffirmed its ultra-easy monetary policy stance and kept the door open to increasing bond purchases.
DEMAND: China accounts for nearly half of global copper demand estimated at about 23 million tonnes this year.
SCRAP: Optimism in the copper market surged in July after news of a Chinese proposal to ban imports of some scrap metal from the end of 2018.
"While the details are vague, we understand it is targeted at category 7 scrap, which includes low-grade copper scrap such as electric motors or metallic hardware," said ANZ analysts.
"China imported about 3.3 million tonnes copper scrap in 2016. We believe a majority of this would be in category 7. However, due to the low grade, its share is closer to 25 percent on a contained-copper basis. This should see import demand of refined copper remain strong over the medium-to-longer term."
IMPORTS: China's imports of refined copper rose nearly 13 percent to more than 283,000 tonnes in July, but the year-to-date total is down more than 21 percent to about 1.83 million tonnes.
INVENTORIES: Also supporting prices are falling stocks of copper in LME-approved warehouses. At 210,725 tonnes, inventories are down more than 40 percent since early May.
PRICES: Aluminium closed up 0.1 percent at $2,107 a tonne, zinc gained 1.1 percent to $3,129, lead slipped to $2,340 from $2,341, tin fell 0.2 percent to $20,750 and nickel ceded 0.1 percent to $12,150.