Copper fell the most in a week amid concern that policy makers will expand efforts to cool the housing market in China, the world’s biggest consumer.
Chinese stocks fell, dragging the benchmark index to a two-month low, as real estate and construction companies tumbled. Sina.com reported the southern city of Shenzhen banned developers from raising home prices. Accelerating inflation means the country should be on “high alert,” Zhou Xiaochuan, head of the People’s Bank of China, said today, signaling a heightened focus on controlling prices.
“Any sign that demand in China may slip is going to hit copper,” Michael Smith, the president of T&K Futures & Options in Port St. Lucie, Florida, said in a telephone interview. “Copper is a building and expansion material, and when that slows, copper feels it.”
On the Comex in New York, copper futures for delivery in May slid 0.8 percent to settle at $3.525 a pound at 1:07 p.m., the biggest decline since March 1.
Chinese Premier Wen Jiabao last month called for local authorities to “decisively” curb real estate speculation and take steps to rein the property market after data showed prices surged.
Stockpiles of copper monitored by the London Metal Exchange, up 63 percent this year, increased 0.5 percent today to 520,500 metric tons, the highest since March 2010. Inventories have risen for 20 straight days, the longest streak since January 2010.
On the LME, copper for delivery in three months declined 0.5 percent to $7,787.50 a ton ($3.53 a pound).
Nickel, aluminum and zinc also fell in London. Tin and lead were higher.