Copper fell for a third day in London on concern demand may weaken as China, the world’s biggest consumer of the metal, moves to cool inflation. China’s biggest banks are near reaching annual lending quotas and plan to stop expanding loan books, according to four people with knowledge of the matter. The country’s benchmark money-market rate rose on speculation borrowing costs will climb. Copper also dropped as the dollar gained and equities retreated after North and South Korea exchanged artillery fire. “The impact of policy tightening and the sale of commodities from strategic state stockpiles could potentially have a more significant impact on underlying commodity markets,” Nick Moore and Daniel Major, analysts at RBS Global Banking & Markets in London, said of China in a report today. Copper for delivery in three months dropped $145, or 1.7 percent, to $8,145 a metric ton at 9:58 a.m. on the London Metal Exchange. Copper for March delivery fell 1.4 percent to $3.71 a pound on the Comex in New York. All of the six main metals traded on the LME slid. The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, added as much as 0.6 percent, making dollar-priced metals more expensive in terms of other monies. South Korea’s air force scrambled fighter jets, an official said. The MSCI World Index of shares dropped as much as 0.6 percent. Loan Target “The Korea news is only likely to contribute to a broader theme of risk aversion,” Major said by e-mail. Chinese regulators are monitoring banks’ loan balances to ensure an official 2010 target for new lending isn’t exceeded, the people said. The government in the past month stepped up a campaign to limit credit expansion after inflation quickened and property prices surged. Imports of copper into the country slid to a one-year low, figures showed yesterday. “Additional supply as a result of sustained sales of Chinese base-metal stockpiles has the potential to weigh on prices in the coming months,” Moore and Major said. LME copper rebounded from the day’s lowest prices as a report showed that growth in Europe’s services and manufacturing industries unexpectedly accelerated in November. A composite index based on a survey of euro-area purchasing managers in both industries advanced to 55.4, Markit Economics said. A reading above 50 indicates expansion. House Sales Figures due at 3 p.m. London time may show lower sales of existing houses in the U.S., the world’s second-biggest copper user. Construction accounts for a quarter of copper demand, according to the Copper Development Association. Purchases fell to a 4.48 million annual rate in October, according to the median of 71 estimates in a Bloomberg News survey. Anglo American Plc and Xstrata Plc will have to resume wage talks after most workers reject a pay offer, according to the union representing strikers at the Collahuasi mine in Chile, the world’s fourth-biggest. The stoppage is in its third week. Orders to draw copper from LME stockpiles, or canceled warrants, gained 1.8 percent to 32,325 tons today, daily exchange figures showed. Copper inventories fell 0.3 percent to 358,050 tons. Tin for three-month delivery on the LME slid 1.2 percent to $24,000 a ton. The metal has jumped 42 percent this year, leading advances on the exchange, after production was disrupted in Indonesia and the Democratic Republic of the Congo. Aluminum declined 1 percent to $2,265 a ton and nickel dropped 1.5 percent to $21,275 a ton. Lead dropped 2.4 percent to $2,196 a ton and zinc fell 1.3 percent to $2,110 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.

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