Copper Extends Losses on Weaker Yuan, Tighter Property Financing

Copper declined for a second day on concern that the yuan’s weakness and delays in loans to the real-estate market will damp demand for the metal in China, the world’s biggest user.

The contract for delivery in three months on the London Metal Exchange retreated as much as 0.7 percent to $7,053.50 a metric ton and was at $7,062 by 4:05 p.m. in Tokyo. Futures are down 4.1 percent this year.

China’s Industrial Bank Co. said yesterday it will delay loans for property projects until the end of March. The Copper Development Association says construction generates about 40 percent of demand for the metal globally. The yuan slid 0.3 percent against the dollar, set for its biggest drop since 2012.

“China’s weaker property market and a falling yuan deepened concern over slowing demand,” said Chae Un Soo, a metals trader at Korea Exchange Bank Futures Co. in Seoul.

A weaker yuan is a “significant market risk” that can signal an economy that is slowing more than indicated, start a trade war and hurt property developers that have been borrowing funds in U.S. dollars, Hao Hong, chief China strategist at BoCom International Holdings Co., wrote in a note.

The metal for delivery in May on the Shanghai Futures Exchange dropped 0.8 percent to close at 49,520 yuan ($8,099) a ton. The contract for May delivery on the Comex in New York slid 0.6 percent to $3.2205 a pound.

On the LME, nickel, aluminum and zinc also declined, while lead and tin were little changed.

Before it's here, it's on the Bloomberg Terminal.