Copper futures fell to the lowest in more than a week on demand concerns after benchmark money-market rates advanced the most since June in China, the world’s biggest consumer of the metal.
Chinese policy makers are withdrawing liquidity as a recovery in the world’s second-largest economy sends inflation to the highest since February. Higher money-market rates raised concern that credit growth will ease, slowing economic expansion and demand for metals.
“The market is clearly nervous about the spike in Chinese rates,” Bill O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. “It shows how sensitive copper is to anything coming out of China. This may keep prices under some pressure.”
Copper futures for delivery in December dropped 0.1 percent to settle at $3.2635 a pound at 1:05 p.m. on the Comex in New York, after touching $3.2455, the lowest since Oct. 14. Prices slid 2 percent yesterday, the biggest loss for a most-active contract since July.
A gauge of real-estate shares listed in Shanghai has fallen 1.1 percent so far this week. The Copper Development Association says construction generates about 40 percent of demand for the metal, used in pipes and wiring.
On the London Metal Exchange, copper for delivery in three months gained 0.1 percent to $7,175 a metric ton ($3.25 a pound).
Also in London, aluminum rose as much as 1 percent. Orders to remove the metal from warehouses rose 2.1 percent to 2.16 million tons and are up 8.2 percent this week, poised for the biggest increase since December.
Lead, nickel tin and zinc were also higher in London.