Copper prices may weaken on possible slowdown in China economy on governmental intervention to tame inflation and public debt. Rising inflation and government debt may cause the Chinese economy to slowdown in 2012 says Wu Xiaoling, Vice Director of the Finance and Economy Committee of National People’s Congress. -In a comment published in the Financial News, the Central Bank’s newspaper, Wu expresses concerns the Chinese economy may suffer as the global economic slowdown hurts its export sector. -The government monetary tightening is also failing to control the rampant inflation. In July, inflation hit a 3 year high of 6.5%. Even though, the rate is down to 6.2% in August, analysts see this as a temporary fall. -New Home prices in August saw a unanimous rise in all the indexed 70 cities, indicating the government failure in controlling home prices. Copper prices at the London Metal Exchange (LME), have fallen from around $9800 in August to $8700 as of September 19, a decline of over 10%. The price fall was mainly on the back of weak US and European economic outlook. As such, any indication of a Chinese slowdown will inevitably crash the metal. At the Multi-Commodity Exchange (MCX), prices have fallen from around Rs 443 to Rs 405 during the same period, a decline of over 8.50%.

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