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Copper had traded in positive territory earlier on Tuesday, after U.S. home prices rose by more than expected in January, and orders for durable goods topped expectations in February.
This fizzled as copper sank after later reports showed U.S. new home sales declined.
The most actively traded copper contract, for May delivery fell 0.25 cent, or 0.1%, at $3.44 a pound on the Comex division of the New York Mercantile Exchange.
These reports are important because of the metal's use in a wide range of industries, including construction, power and general manufacturing.
In fact, investors raised net-short positions in U.S. copper futures and options by 53 percent to 25,719 contracts in the week ended March 19.
Copper prices have been under pressure in recent weeks as stockpiles surged and new property-market restrictions in China raised concerns about demand.
Metal held in London Metal Exchange warehouses is up 75% in 2013, underpinning views held by some in the market that supply will exceed demand for the first time since 2009.
Copper prices are heading for a second consecutive monthly loss in what would be the longest slump since the end of 2011.
Stockpiles monitored by exchanges in London, Shanghai and New York stand at about 873,000 metric tons, or almost five months of North American demand.
Down but not out
It may be premature to count-out copper - or count on a surplus in 2013.
Sales of air conditioners and orders for electrical equipment in China suggest improving demand.
China's passenger vehicle market rose 20 percent to 2.84 million units in January and February in the strongest start since 2010.
The transportation industry accounts for about 11 percent of the country’s copper use and household appliances account for 15 percent.
China accounts for around 38 per cent of global copper output.
Key manufacturing sector data will be released for China after Easter, providing a read on the strength of the recovery and a read of the prospects for copper.