Copper Falls as Chinese Credit Slump Fuels Demand Concern

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Copper fell for a second day in New York amid concern about the outlook for Chinese demand for the metal after new credit in the nation declined. Nickel dropped from a three-week high in London.

Aggregate financing slumped to 1.23 trillion yuan ($204 billion) in December from 1.63 trillion yuan a year earlier, China's central bank said today. The country is the world's biggest consumer of copper. Prices also retreated as the dollar gained against a 10-currency basket, making raw materials priced in greenbacks more expensive in terms of other monies.

"Slowing credit growth in China obviously raises the question about how robust demand will be over the coming months," said Ole Hansen, the head of commodity strategy at Saxo Bank A/S in Copenhagen. "The dollar has turned stronger again, which is creating some problems for metals in general."

Copper for delivery in March lost 0.3 percent to $3.326 a pound by 7:31 a.m. on the Comex in New York. Copper for delivery in three months gained 0.1 percent to $7,290 a metric ton on the London Metal Exchange.

Inventories of the metal monitored by the LME declined for a 50th straight session to a one-year low of 336,250 tons, daily data showed. Orders to remove copper from warehouses fell for a 24th day to 199,625 tons.

Nickel for delivery in three months slipped 0.1 percent to $14,325 a ton on the LME, rebounding from a drop of as much as 0.8 percent. Prices gained 6.9 percent in the three prior sessions amid concern a ban on ore exports from Indonesia, the biggest producer of nickel from mines, will curb supply. Lead slid, paring a three-day climb of 4.2 percent.

"Profit-taking has become the focus, especially after such a strong rally over the past week," Hansen said of nickel and lead. Declines by copper may be limited as stockpiles continue to shrink, he said.

Metals retreated even after the World Bank raised its forecast for global economic growth this year to 3.2 percent from June's 3 percent projection. The multilateral lender cut its estimate for China to 7.7 percent from 8 percent

Aluminum, zinc and tin fell in London.

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