Copper prices edged lower in Shanghai and London on Thursday, reversing gains in the previous session, as fears a worsening nuclear crisis in Japan would hurt the economy weighed on market sentiment.
Japan, in a battle to avert catastrophe, sent military helicopters to douse overheating reactors at a nuclear powerplant hit by last week's earthquake.
"The market sentiment remains fragile," said Lin Yuhui, deputy general manager at Jinhui Futures. "The impact of the nuclear crisis is still unknown, but will sure take a huge toll on the economy."
Japan said the damage from last week's devastating earthquake to the economy would be limited, but total damage would be bigger than that from 1995's Kobe earthquake of about 20 trillion yen ($255 billion).
Three-month copper on the London Metal Exchange edged down 0.2 percent at $9,239.75 a tonne by 0346 GMT, after posting its biggest one-day rise in 2-1/2 weeks on Wednesday.
Shanghai's most-active copper futures contract lost as much as 1 percent in early trade, but trimmed losses to 70,100 yuan ($10,667) a tonne, down 0.7 percent from the previous close.
"There has some buying from the Chinese -- some found the current price level decent for imports pricing, others just put in speculative bids," said a Shanghai-based trader.
"It may go on for a bit, but whether we'll see copper prices strengthen again eventually depends on the prospects of the global economy, granted the Japan crisis will not last too long."
The even looser monetary policy adopted by the Japanese central bank after the massive earthquake and tsunami hit last Friday could potentially benefit metals, Lin said.
LME aluminium gained nearly 1 percent at $2,478, after dropping to $2,452 on Wednesday, its lowest since late January.
Shanghai aluminium lost half a percent at 16,565 yuan.
Japan's benchmark Nikkei share average lost 2 percent, reversing a 4 percent rally in the previous session, as a surging yen weighed on shares of major exporters such as automakers. (Reuters)
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