Copper in London Declines on U.S. Growth Concern, China Commodity Selloff

Sep 9 (Bloomberg)--

Copper declined on signs that U.S. growth may be slowing and on a selloff in Chinese commodities after a report that regulators may be investigating large positions in Shanghai rubber futures. Zinc dropped 6.5 percent.

The contract for three-month delivery dipped as much as 2.8 percent to $7,460 a metric ton on the London Metal Exchange, and traded at $7,553 at 3:16 p.m. in Shanghai.

The U.S. Federal Reserve said in a report overnight that the economy was showing "widespread signs of a deceleration.” A survey by 12 Fed regional banks showed five reported conditions were mixed or decelerating, five said that there was "economic growth at a moderate pace,” and two pointed to "positive developments or net improvements.”

"The market is still affected by the bad news and data coming out from time to time, so it’s difficult for copper to gain further at this point,” Cao Yanghui, an analyst at Nanhua Futures Co., said by phone from Hangzhou.

Copper for December delivery in Shanghai tumbled as much as 4.4 percent to 57,170 ($8,424) yuan, and closed at 58,590 yuan a ton. Zinc and aluminum fell by the daily 5 percent limit to 17,190 yuan and 15,000 yuan in morning session, respectively. Zinc ended the day at 17,680 yuan and aluminum at 15,580 yuan.

"There’s market talk today that a certain trader is being investigated by the securities regulator, leading to a large liquidation earlier,” Ying Haoliang, an analyst at Orient Securities Futures Co., said by phone from Shanghai.
Probe Talk

Commodity prices in China declined today on market speculation that regulators were investigating large positions in natural rubber futures, the Securities Times said on its website, citing people it didn’t identify. Rubber prices dropped in Shanghai and the declines spilled over into other commodities including copper, aluminum and zinc, it said. Rubber for January delivery dropped as much as 4.6 percent, the most since June 7, to 25,230 yuan a ton.

An official at the China Securities Regulatory Commission, who didn’t wish to be identified, declined to comment.

China’s stocks dropped the most in two weeks, led by financial and metal companies. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, fell 1.4 percent to close at 2,656.35. The 21st Century Business Herald reported yesterday China may introduce more measures to curb the property market, including stopping loans to real estate developers and compulsory lowering of home prices.

China’s government will issue more measures to curb speculation as policy makers had been determined to cut the housing prices, Jones Lang LaSalle Inc. Chief Executive officer Colin Dyer said today in an interview.
Trade Data

"The market will look at the production and trade data in the next couple of days to assess the economic condition,” Zhao Kai, an analyst at Jiurui Futures Co. said from Shenzhen. "We’ll also watch the consumption side in September.”

China’s customs department will release the August trade data tomorrow.

Zinc in London declined by the most since June 29 to $2,075.25 a ton and last traded at $2,160 a ton. Aluminum fell 1.4 percent to $2,130 a ton and lead slid 1.9 percent to $2,193.25 a ton. Nickel lost 1.1 percent to $22,650 a ton and tin dropped 0.8 percent to $21,500 a ton at 3:15 p.m. in Shanghai.