Jan. 10 （Bloomberg） -- Copper in London dropped for a fifth day, erasing gains in early Asian trading, on speculation China may further tighten monetary policy, dimming the demand outlook in the world’s largest metals user.
Three-month copper on the London Metal Exchange fell as much as 0.4 percent to $9,378 a metric ton before trading at $9,410 by 9:49 a.m. Singapore time. It gained as much as 0.5 percent earlier, rebounding from its worst week in six. Aluminum, zinc and lead also declined.
“The issue of tightening in China has been brought back to the fore and against this backdrop, investors are unwilling to enter the market at such high levels and consumers are also unwilling to buy at such high prices,” said Yang Zhenqiang, an analyst at First Futures Brokerage Co.
April-delivery metal on the Shanghai Futures Exchange rose 0.6 percent to 70,180 yuan （$10,585） a ton, paring an earlier advance of as much as 1.3 percent. Copper on the Comex in New York gained 0.4 percent to $4.2980 a pound, after climbing as much as 1.1 percent earlier.
China ordered banks to set aside more reserves six times in 2010 and boosted rates twice to tame inflation and curb asset bubbles after record gains in lending and property prices. The central bank should consider a series of interest rate increases of 50 basis points if the country’s consumer prices remain high in the first half of this year, Liu Yuhui, a researcher with the Chinese Academy of Social Science, wrote in a commentary published in the China Securities Journal today.
Aluminum in London dropped 0.5 percent to $2,506.25 a ton, zinc declined 1.6 percent to $2,407 a ton, and lead decreased 0.7 percent to $2,631 a ton. Nickel was unchanged at $24,200 a ton, while tin hadn’t traded.
--Editors: Richard Dobson, Wendy Pugh.
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