Nov. 26 （Bloomberg） -- Copper fell, capping a third straight weekly drop, on concern that demand will decline as China, the world’s largest metal consumer, moves to curb speculation and cool inflation.
China’s benchmark money-market rate rose to the highest level in almost two months on speculation that policy makers will raise borrowing costs. The Shanghai Futures Exchange will increase margins on gold, copper and aluminum after the market closes on Nov. 29. The dollar rallied amid concerns that the North and South Korean conflict and European debt crisis will escalate.
“Besides concerns about possible monetary tightening in China, other main factors were rising risk aversion, the continued strength of the dollar and the increase of margins on the SHFE,” Comerzbank AG said in a report.
Copper futures for March delivery fell 0.4 cent, or 0.1 percent, to settle at $3.7625 a pound at 1:23 p.m. on the Comex in New York. The price lost 2.1 percent this week, after slumping 2.7 percent the previous two weeks. U.S. markets were closed yesterday for the Thanksgiving holiday.
The Standard & Poor’s 500 Index fell for the third time in four days.
“As an industrial commodity, copper is seeing a little selloff with the equities,” said Phil Streible, a senior strategist at Lind-Waldock, a broker in Chicago.
Copper may trade around $3.70 by the end of the year as Chinese concerns cap price gains, Streible said. The price has climbed 12 percent this year, reaching a 30-month high of $4.0875 on Nov. 11.
“There will be a rate increase in China, and everybody knows that,” he said.
On the London Metal Exchange, copper for delivery in three months dropped $101, or 1.2 percent, to close at $8,239 a ton （$3.74 a pound）.
Zinc, tin, lead, aluminum and nickel also fell on the LME.
--Editors: Millie Munshi, Patrick McKiernan
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