Copper headed for a third weekly loss, the longest streak since June, as investors weighed weakening economic data in China and the risk of bond defaults spreading in the world’s biggest consumer of commodities.
The metal, trading near a 44-month low on the London Metal Exchange, fell 5.5 percent this week, the most since April. Copper has dropped 13 percent this year. Futures on the Shanghai Futures Exchange headed for the biggest weekly decline since since September 2011 and traded near the lowest since July 2009.
Bank of America Corp., UBS AG, JPMorgan Chase & Co. and Nomura Holdings Inc. all lowered forecasts for Chinese economic growth in 2014. Concern is rising that defaults may increase after Shanghai Chaori Solar Energy this month became the first domestic bond default, said David Lennox, a resource analyst at Fat Prophets, an investment research firm in Sydney. Chinese banks may cut loans to industries including commodities by 20 percent, Reuters reported.
“You’ve always had bubbling in the background the oversupply,” said Lennox. Any cut in lending to commodities companies would return copper to the market that had been tied up as collateral for loans, increasing oversupply, he said.
The contract for delivery in three months in London slipped as much as 0.5 percent to $6,386 a metric ton and was at $6,405.75 at 12:25 p.m. in Hong Kong.
Futures for June delivery in Shanghai fell 0.6 percent to 44,140 yuan ($7,184) a ton. Copper for delivery in May was little changed on the Comex in New York at $2.921 a pound.
Nickel in London pared a weekly gain to 3.1 percent. It has advanced for six straight weeks, the longest winning streak since April 2010.
On the LME, lead and zinc rose, aluminum was little changed and tin hadn’t traded yet.
To contact the editors responsible for this story: Brett Miller at email@example.com Jarrett Banks