The People’s Bank of China sold repurchase contracts for the first time since June after data showed record new credit was extended. The yuan reached this year’s low amid speculation China will lower its growth target. The government cut its goal for industrial-production growth this year to about 9.5 percent, the Ministry of Industry and Information Technology said.
“Today you had the PBOC selling repos in order to try and suck out funds from the banking system and reduce credit availability, which is being construed as negative for manufacturing, and therefore real copper consumption,” David Wilson, an analyst at Citigroup Inc. in London, said by e-mail.
Copper for delivery in three months lost 0.5 percent to $7,139 a metric ton by 9:47 a.m. on the London Metal Exchange. Copper for March delivery fell 0.1 percent to $3.261 a pound on the Comex in New York, where floor trading was shut yesterday for the Presidents’ Day holiday.
Economists expect China, the mining industry’s biggest customer, to expand at the slowest pace in 24 years in 2014, estimates compiled by Bloomberg show.
Stockpiles of copper monitored by the LME, at a 14-month low, slid 1 percent to 293,150 tons, daily data showed. Orders to remove the metal from warehouses dropped 1.7 percent to 167,925 tons, the lowest since May 2013.
Aluminum for delivery in three months fell 0.2 percent to $1,729 a ton on the LME, erasing a gain of as much as 0.3 percent. Prices had climbed after Alcoa Inc. (AA) said it will close an Australian smelter and leading global producer United Co. Rusal said its output is set to decline further in 2014.
Producers of the lightweight metal will cut at least 700,000 tons of capacity this year, according to Citigroup. Production will still exceed demand by 162,000 tons, from 632,000 tons in 2013, the bank said in a report on Feb. 5.
“The market is still in surplus,” Wilson said.
Zinc, lead and tin dropped in London as nickel gained.
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