Copper Caps Second Monthly Decline as China Demand May Ease

Copper fell in New York, capping the second straight monthly drop, on mounting concern that demand will slow in China, the world’s largest metals user.

China’s central bank has raised lenders’ reserve requirements 10 times since the start of 2010 and boosted interest rates four times since October to rein in accelerating consumer prices and slow growth. Borrowing costs may increase again by May 2, Dong Tao, an analyst at Credit Suisse Group AG, said in a report yesterday. Copper dropped 3 percent this month after losing 4.2 percent in March.

“China is slowing down,” said Phil Streible, a senior strategist at broker Lind-Waldock inChicago. “There’s very little demand at the moment. Copper will be drifting lower slowly.”

Copper futures for July delivery fell 8.25 cents, or 1.9 percent, to close at $4.179 a pound at 1:13 p.m. on the Comex in New York. The metal was down 5.4 percent for the week, the biggest such drop since mid-March.

Prices extended declines after a private report showed U.S. business activity fell more than forecast this month.

The metal has dropped 10 percent since reaching a record $4.6575 on Feb. 15 as the U.S. economy grew at a slower pace in the first quarter and Japan was rattled by a deadly earthquake.

The London Metal Exchange is closed today and May 2.

(Source: http://www.bloomberg.com/news/2011-04-29/copper-caps-second-monthly-decline-as-china-demand-may-ease.html)