April 9 (Bloomberg) -- Copper fell the most in two weeks in London as increased government scrutiny of corporate debt in China, the biggest user, fueled concern that defaults by manufacturers will curb demand.
The National Development and Reform Commission began a special investigation last month into how some companies use bond proceeds, two people with direct knowledge of the matter said today. Copper futures posted the biggest loss in more than two years on March 7 after China’s first onshore default dimmed demand prospects.
“There’s a lot of concern about the weakness in China,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in an interview. “The risk of more defaults is really a huge factor” pushing prices lower, he said.
Copper for delivery in three months fell 0.8 percent to settle at $6,617 a metric ton ($3 a pound) at 5:50 p.m. on the London Metal Exchange, the biggest loss since March 26. On the Comex in New York, copper futures for delivery in May declined 0.5 percent to $3.037 a pound.
Prices have dropped 10 percent this year, the worst performance of the main six metals on the LME. Supply will exceed demand this year by the most since 2001, according to the International Copper Study Group in Lisbon.
Aluminum rose 2.1 percent in London to $1,857.50 a ton, the biggest gain since March 4. Global demand will exceed production this year, Alcoa Inc. said yesterday, projecting an end to an almost decade-long surplus driven by Chinese output.
Nickel for delivery in three months climbed as much as 1.7 percent to $16,740 a ton, the highest since March 28, 2013.
Lead and tin gained in London, while zinc fell.