June 6 (Bloomberg) -- Copper in New York fell, capping the biggest weekly loss since March, amid concern that a warehousing probe in China will curtail use of the metal in finance deals.
China’s Qingdao Port is looking at whether companies offering copper as collateral for loans counted the same batches more than once. Macquarie Group Ltd. said any lending curbs stemming from the review may weigh on prices, which lost 2.3 percent this week, the most since March 14.
Copper has dropped 3.8 percent in four days after the inquiry was reported, extending a decline this year amid concern that slowing global economic growth would crimp demand. China’s finance deals use commodities from iron-ore to soybeans to obtain credit and may tie up as much 1 million metric tons of copper, Goldman Sachs Group Inc. estimated in a March report.
“Worries that the slowdown in demand from Chinese financing deals after recent inventory fears in Qingdao Port are still the driver here,” Steven Scacalossi, head of global metals sales at TD Securities in Toronto, said in an e-mailed report. “Momentum sellers are joining the fray.”
Copper futures for July delivery fell 1.3 percent to settle at $3.051 a pound at 1:13 p.m. on the Comex in New York. On the London Metal Exchange, copper for delivery in three months slid 1.4 percent to $6,688 a ton ($3.03 a pound).
Chinese traders are selling in the physical market amid the Qingdao investigation, and more metal will be released next week, Shanghai-based consultancy SMM Information & Technology Co. said today.
Signaling higher supplies, copper for immediate delivery traded at a premium of as little as $3 a ton over the LME’s three-month contract, the smallest price gap since April, when the spread was at a discount.
Nickel for delivery in three months declined 0.8 percent to $18,875 a ton on the LME, taking the weekly loss to 1.9 percent. That’s the first back-to-back weekly declines since January.
Tin fell in London, while aluminum, zinc and lead gained.
To contact the editors responsible for this story: Millie Munshi at email@example.com Joe Richter, Steve Stroth