In early New York trade on Thursday, December copper came under renewed pressure, diving to a low of $3.1715 a pound after weak data out of China hurt sentiment.
The nearly 1% pullback is undoing a recovery in the price of the red metal from 2-month lows hit a week ago and comes after a gauge of economic activity in China slowed sharply in August.
Growth in China’s manufacturing sector slumped to a three month low according to an HSBC survey of purchasing managers, falling to just above expansionary level at 50.3 from 51.7 in July.
Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said both domestic and external new orders rose at slower rates and disinflationary pressure returned as input and output prices contracted.
"Today's data suggest that the economic recovery is still continuing but its momentum has slowed again. Therefore, industrial demand and activity growth will likely stay on a relatively subdued path," said Qu.
The manufacturing outlook is just the latest indicator with warning signs for the the Chinese economy.
Growth in China’s services sector slowed sharply in July to its lowest level in nearly nine years, while central bank data released last week showed Chinese banks' extension of new credit slumped in the same month to the lowest level since the global financial crisis.
Conditions in the already struggling property sector were also bleaker than expected with home sales dropping 18% and developers’ inventories of unsold properties rising 25% compared to last year.
China's property sector which has enjoyed years of red-hot growth, is a key component of its economy and also accounts for a big chunk of copper demand.
China consumers some 45% of the world's refined copper, but the country's imports fell 3% in July, the third straight month of losses, to 340,000 tonnes.
However, year to date China is still importing refined copper at a record setting pace – up more than 20% over 2013 to 2.84 million tonnes.
The copper market is expected to be in a 226,000 tonne surplus by the end of 2014, a Reuters poll in July showed, with the surplus seen rising to 285,000 tonnes in 2015.