Market talk of possible China copper outflows ranged from 10,000 to 20,000 tonnes, but traders could not confirm the quantity. The senior trader noted said were several copper cargoes, originally destined for mainland China, in Hong Kong looking for destinations. China reduced its copper export duties earlier this year and cut domestic output in a bid to help the sluggish industry at home. A lack of domestic demand has piled up copper stocks in China and traders there had estimated up to 10,000 tonnes of copper stored in Chinese bonded warehouses.

Premiums, already well below $20, could edge down further, the trader said. The traders said demand was still fairly weak in Asia and falls on the London Metal Exchange further dampened sentiment in the region. Some traders also worried about aluminium inflows, noting cargoes in Hong Kong. Onetrader at a Singapore trading house said metal movements between Hong Kong and China had decreased significantly, not only because of slow Chinese demand.

"The Chinese government has been increasing its crackdown on metal smuggling recently. That also slowed down the market," said the trader.

An aluminium trader at another European trading house, however, said aluminium premiums were unlikely to move significantly based on current supply and demand.