Copper Slumps From One-Month High on China Tightening Concern

Copper declined from a one-month high as China’s money-market rates surged and after U.S. payrolls rose less than forecast, curbing the demand prospect for the metal in the top users.

The contract for delivery in three months on the London Metal Exchange fell as much as 1.1 percent, the most since Oct. 9, to $7,249.75 a metric ton and traded at $7,261.75 by 3:13 p.m. in Tokyo. The price lost 8.4 percent this year. It touched $7,350 yesterday, the highest intra-day level since Sept. 20.

China’s benchmark money-market rate jumped the most since July as the People’s Bank of China refrained from adding funds to markets. Stocks in Shanghai tumbled as much as 1.5 percent today. Data delayed because of the U.S. government shutdown showed yesterday that employers added 148,000 workers last month, below the 180,000 gain projected in a Bloomberg survey.

“Stocks and metals were hit by concern that China will tighten its monetary policies to curb rising housing prices and inflation,” said Tetsu Emori, the chief fund manager at Astmax Asset Management Inc. The U.S. payroll data also put downward pressure on metals, he said.

China’s seven-day repurchase rate, a gauge of funding availability in the banking system, surged 45 basis points to 4.03 percent in Shanghai, according to a weighted average compiled by the National Interbank Funding Center.

The consumer-price index rose the most since February last month and home prices in four major cities jumped the most since January 2011. Song Guoqing, an academic adviser to the PBOC, said Oct. 20 the authority may tighten policy this year if inflation quickens.

Copper for delivery in January on the Shanghai Futures Exchange was little changed at 52,120 yuan ($8,562) a ton. Futures for delivery in December fell 0.9 percent at $3.306 a pound on the Comex in New York.

On the LME, aluminum, nickel, lead and zinc also declined, while tin advanced for a third day.

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