Copper pressured as Shanghai Composite plunges at close; Dollar keeps strengthening

Copper prices saw a drop on Thursday after Chinese markets again fell sharply one hour before the close and on strengthening U.S. dollar.

Comex copper for September delivery dropped 2.2 cents, or 0.91%, to trade at $2.385 a pound during European trade.

A day earlier, the red metal added 0.5 cents, or 0.21%, to end at $2.407, while on Monday futures fell to a six-year low of $2.336.

The Shanghai Composite again made investors jittery on Thursday, with equities plunging sharply in the last hour of trade amid reports that Chinese banks were investigating their exposure to the stock market. The benchmark was last down 2.20% to 3,882.03.

Earlier this week, equity markets in China suffered a dramatic drop of 8.5% in the Shanghai benchmark the biggest one-day drop since February 2007, amid leaks that government was to withdraw buying of stocks and securities.

The drop made officials intervene and provide measures to spur liquidity and calm investors, i.e. to buy more shares in order to stabilize markets, while the country's central bank hinted at more policy easing if needed.

Analysts are now concerned that the plunge in the stock market could spread to other parts of the Chinese economy, triggering fears that the Asian nation's demand for the industrial metal will decline.

Meanwhile, the greenback was strengthening against its peers encouraged by a slightly hawkish statement from the Federal Open Market Committee in determining when to lift short-term rates.

The greenback was last at ¥124.35, its highest level since July 21, up from ¥123.94 late Wednesday in New York.

The buck also strengthened against the euro, which was last at $1.0968 from $1.0986 in New York overnight.