Copper Drops on Outlook for Credit Tightening in Top User China

  • Barclays says effects of credit easing look to be moderating
  • Nickel trades steady as Philippines shuts more mine operations

Copper fell with most industrial metals amid speculation that credit conditions in China, the biggest user, will curb demand in the second half of the year. Nickel held last week’s advance as the Philippines shuttered more mines as part of as environmental crackdown.

While new lending figures released last week topped estimates, the stimulative effects of the easing of credit conditions in real estate look to be moderating, Barclays Plc said. Copper also retreated after data on Monday showed China’s home-price gains tapered off last month, as second-tier cities joined some of the nation’s largest hubs in imposing housing curbs to cool surging prices.

"Our overall read for China’s recent economic data, as it relates to copper, is one of caution," Dane Davis, an analyst at Barclays in London, said in a report dated Monday. "We see few reasons to believe that this rally has staying power."

Copper for delivery in three months fell 0.8 percent to $4,881 a metric ton by 11 a.m. on the London Metal Exchange. Prices reached $5,032 on July 13, the highest since April 29. The bourse said Sunday that ring trading will move outside London to Chelmsford for at least a few days after a structural fault closed its building.

Stimulus Expectations

Metals rallied last week as investors bought commodities and equities on speculation that policy makers around the world would take steps to shore up economic growth following the U.K.’s June 23 vote to leave the European Union.

Nickel gained as much as 1.5 percent today to $10,435 a ton in London and was last at little changed at $10,285. Berong Nickel Corp.’s operations in Palawan province was suspended after it failed to control river siltation, Mines & Geosciences Bureau Director Leo Jasareno said in a phone message. The metal has climbed 9 percent this month after the country began an audit of all mining operations and imposed a moratorium on approval of new projects.

In other metals news:

  • Aluminum, lead and tin retreated on the LME, while zinc was little changed.
  • Copper canceled warrants, or orders to remove metal from LME-tracked warehouses, climbed 5 percent to the highest since November.
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