Copper headed for a third weekly drop in London on concern that demand may slow down as China, the world’s biggest consumer of the metal, moves to control inflation. China’s central bank said it will “normalize” monetary conditions, reinforcing forecasts for higher interest rates. Copper also fell this week as a bailout for Ireland renewed concern about Europe’s sovereign-debt crisis and North and South Korea exchanged artillery fire. Supply concern stemming from a strike at the Collahuasi mine in Chile provided support. “Nervousness will persist until we get further clarification on the situation in Europe, China, Korea and Collahuasi,” Marina Budayeva, an analyst at Sucden Financial Ltd. in London, said by e-mail. Copper for three-month delivery dropped $25, or 0.3 percent, to $8,225 a metric ton at 9:41 a.m. on the London Metal Exchange. Copper for delivery in March slid 0.6 percent to $3.745 a pound on the Comex in New York. Floor trading on Comex is closed today for the Thanksgiving holiday. LME copper is down 2.2 percent this week. Prices rose yesterday as reports showed higher personal spending and lower claims for unemployment benefits in the U.S., the second-largest copper user. Other figures showed unexpected drops in orders for long-lasting goods and sales of new houses. Bank Reserves “We are still seeing very mixed signals from the U.S.,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in an e-mailed report. The People’s Bank of China has ordered lenders twice this month to hold more money in reserve to help curb inflation that’s at a two-year high. Both higher rates and bank reserve ratios may be needed to control liquidity, PBOC adviser Xia Bin said at a conference in Shanghai today. The strike at Collahuasi, the world’s fourth-biggest copper mine and a venture between Anglo American Plc and Xstrata Plc, is in its third week. The mine is negotiating directly with workers in an effort to end the stoppage, ignoring union calls to resume wage talks. Unionized workers at Santiago-based Codelco’s Radomiro Tomic copper mine voted to accept a wage accord, averting a strike, a union leader said. Radomiro Tomic also is in Chile, the largest copper-producing nation. Tin for three-month delivery on the LME was unchanged at $24,300 a ton. Prices reached a record $27,500 on Nov. 9. The metal has jumped 43 percent this year, leading advances on the exchange, after production was disrupted in Indonesia and the Democratic Republic of Congo. Aluminum rose 0.1 percent to $2,261 a ton and nickel slipped 0.2 percent to $22,450 a ton. Lead gained 0.4 percent to $2,231 a ton and zinc was little changed at $2,121 a ton. To contact the reporter on this story: Maria Kolesnikova in Moscow at mkolesnikova@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter@bloomberg.net.

Source