BS: Copper Declines as China Slowdown Risk Fuels Demand Concern
Aug. 5 (Bloomberg) -- Copper fell from a three-month high on concern that demand from China, the world’s biggest user, will flag if property prices slump.
China’s banking regulator told lenders to include worst- case scenarios of real-estate values dropping 50 percent to 60 percent in cities where they have risen excessively, a person with knowledge of the matter said. Construction accounts for a quarter of copper demand, according to the Copper Development Association.
“If China wants to signal a slowdown, then the copper rally may have run its course,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago.
Copper futures for September delivery fell 4.80 cents, or 1.4 percent, to $3.3565 a pound at 11:21 a.m. on the Comex in New York. Yesterday, the contract reached $3.4105, the highest price since April 29.
Chinese regulators have tightened real-estate lending and cracked down on speculation since mid-April, after residential real-estate prices soared 68 percent in the first quarter from a year earlier, according to estimates from Knight Frank LLP.
Measures aimed at capping China’s annual demand growth at 8 percent are a “good thing to happen,” Rodrigo Toro, corporate senior sales vice president at Codelco, told reporters at the World Expo in Shanghai. Santiago-based Codelco is the world’s largest copper producer.
Copper prices also slid as orders to pull supplies from stockpiles declined for a second day.
Copper inventories slipped 0.2 percent to 413,075 tons. They shrank 8.3 percent in July, the most since June 2009, and are down 18 percent this year, on course for the first annual drop since 2004.
“It’s the seasonal weak spot for consumption,” Thurtell said.
On the London Metal Exchange, copper for delivery in three months declined $94.50, or 1.3 percent, to $7,410.50 a metric ton. Aluminum, lead and zinc also were down, while nickel and tin were higher.
--Editors: Michael Arndt, Steve Stroth.
To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net; Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
