Copper in Shanghai declined for the first time in three days on concern that moves to curb credit growth and tame in inflation by China, the world’s biggest consumer, may reduce demand for raw materials. The November-delivery contract on the Shanghai Futures Exchange dropped as much as 0.6 percent to 67,060 yuan ($10,505) a metric ton and was at 67,380 yuan by 10:47 a.m. local time. Reserve requirements are being extended to the margin deposits commercial banks collect from customers, a move that may drain 900 billion yuan from the banking system over six months, Bank of America Merrill Lynch economist Lu Ting said in a note on Aug. 26. Mizuho Securities Asia Ltd. cited similar information. A central bank press official declined to comment. The central bank move “showed the country’s resolve to control inflation, which is slightly bearish for the base metals market as it crimps money liquidity,” Che Hongyun, an analyst at Galaxy Futures Co., said by phone from Shanghai today. Aluminum for November delivery in Shanghai was little changed at 17,365 yuan a ton and zinc was also little changed at 17,100 yuan a ton. Copper for December delivery fell 0.7 percent to $4.09 a pound on the Comex in New York, declining for the first day in five. The price gained 2.9 percent for the week, after dropping 11 percent in the previous three weeks on concern the global economic recovery is faltering. The London Metal Exchange is closed today for the Summer Bank Holiday. U.S. Recovery London copper for three-month delivery on Aug. 26 touched $9,139, the highest price in three weeks, after Federal Reserve Chairman Ben S. Bernanke said the U.S. economy is slowly recovering and the central bank has more means to prop up growth if appropriate. “The macro conditions are now turning bullish for copper, after the Federal Reserve allayed concern the U.S. economy will stall, boosting optimism that the global economic recovery is intact,” Galaxy Futures’ Che said. Copper stockpiles fell 8.7 percent to 102,258 tons last week, the Shanghai exchange said Aug. 26. Production of the metal in China climbed 15 percent from a year earlier in the first seven months, data showed on Aug. 9. “It’s possible that China has stepped into the copper peak consumption season ahead of normal because the big users such as wire and cables are now seeing more orders with expansion of China’s power network project,” Che said. With assistance from Feiwen Rong in Beijing. Editors: Richard Dobson, Jake Lloyd-Smith To contact Bloomberg News staff for this story: Jae Hur in Tokyo at +81-3-3201-8282 or jhur1@bloomberg.net To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net

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