Copper may fall in London on concern China, the world’s largest consumer of the metal, will take more steps to curb inflation that’s above the government target. The Chinese central bank yesterday increased lenders’ reserve requirements to a record after growth in consumer prices sped up to the fastest pace in almost three years. Interest rates may rise “in weeks, if not days,” according to an unsigned editorial in the China Daily today. “Monetary tightening remains a concern,” said Nic Brown, an analyst at Natixis Commodity Markets Ltd. in London. “The high levels of inflation remain a concern. They haven’t gone away.” Copper for three-month delivery dropped $15, or 0.2 percent, to $9,154 a metric ton by 9:53 a.m. on the London Metal Exchange. Prices gained the most since May 18 yesterday. September-delivery copper fell 0.3 percent to $4.163 a pound on the Comex in New York. Chinese inflation climbed to 5.5 percent in May, figures showed yesterday. It has topped the government’s 4 percent target each month this year. Inflation may reach 6 percent this month, according to banks from Societe Generale SA to UBS AG, prompting speculation interest rates may rise further after four increases since September. Still, industrial production in China advanced 13.3 percent from a year earlier in May, figures showed yesterday. That was little changed from the prior month. ‘Broadly Positive’ “Underlying demand coming out of China looks good,” said Brown at Natixis. “We are broadly positive.” India’s central bank will boost interest rates a further 0.75 percentage point by the end of the year, including a quarter-point increase tomorrow, Goldman Sachs Group Inc. analysts Vishal Vaibhaw and Tushar Poddar wrote in a report dated yesterday. Copper stockpiles in China may have halved over the past two months as users drew down reserves in bonded and exchange- monitored warehouses. Inventories in bonded warehouses, which are undisclosed, may have dropped to about 300,000 tons, according to estimates from traders and analysts in the country including Shanghai East Asia Futures Co. Inventories tracked by the LME fell for a third day, dropping 1,050 tons to 472,625 tons, daily exchange figures showed. Canceled warrants, or orders to remove copper from warehouses, fell 775 tons to 16,000 tons. Zinc for three-month delivery on the LME fell 0.4 percent to $2,271 a ton and lead declined 0.5 percent to $2,567 a ton. Tin dropped 0.6 percent to $25,500 a ton, aluminum was little changed at $2,628 a ton and nickel gained 0.2 percent to $22,350 a ton. To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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