London copper turns lower as dollar firms
"We are expecting a very strong ramp-up in state power grid tenders from April. That should boost demand for wire rod. But we expect real estate and machinery sectors to be weak near-term," said analyst Ivan Szpakowski of Citi in Hong Kong.
"For prices, a key catalyst is macro sentiment, which is bearish on China and Europe right now. We need to see an improvement in one of those for prices to move higher."
Investment by the State Grid Corporation of China is expected to grow 9 percent this year. Demand from the power sector accounted for nearly half of China's estimated 8.7 million tonnes of refined copper consumption last year.
China's annual consumer price inflation recovered in February, exceeding expectations, but producer prices continued to slide, underscoring weakness in the economy and intensifying pressure on policymakers to find new ways to support growth.
Three-month copper on the London Metal Exchange slipped by 0.5 percent to \\$5,840 a tonne by 0329 GMT, eroding a 2.2 percent gain in the previous session.
The most traded May copper contract on the Shanghai Futures Exchange held a 1.2 percent advance to 42,510 yuan (\\$6,787) a tonne, having hit a one-week high overnight.
A severe drought in top metals miner Chile is fanning supply risks for copper.
Much of China's loss-making metals industry such as aluminium plants have been subsidised by local governments looking to boost economic growth, but this source of credit may be under threat.
China's plan to run its biggest fiscal deficit since the global financial crisis may help develop its bond market, but the extra competition for funding could sink some of the major providers of local government financing.
Adding pressure to commodities, the US dollar held near multi-year highs against the yen and euro on Tuesday amid starkly different outlooks for global interest rates.
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