Copper Falls in London as India’s Rate Increase May Slow Demand
Copper declined for the first day in three in London after India raised interest rates, heightening speculation that metals demand may slow as developing countries seek to contain inflation. London Metal Exchange electronic trading was halted because of “connectivity issues.”
India’s central bank increased the benchmark rate to a two- year high of 6.5 percent, joining China, South Korea, Brazil and Thailand in higher rates. Higher margins were also announced yesterday for copper, nickel and tin, requiring traders to put more cash down to trade the metals.
“Inflation is not good when the fastest growing industrial countries feel that they have to tighten monetary policy to combat domestic price pressures,” said Nic Brown, an analyst at Natixis Commodity Markets Ltd. in London. Higher margins “might constrain the potential size of some players’ positions.”
Copper for delivery in three months fell $229, or 2.4 percent, to $9,300 a metric ton by 11:45 a.m. on the London Metal Exchange. Electronic trading on the LME was halted at 11:10 a.m. after some users had “connectivity issues,” spokesman Stephen White said by phone today.
In New York, copper for March delivery declined 9.7 cents, or 2.2 percent, to $4.251 a pound on Comex.
Zinc dropped 2.4 percent in London, the ninth consecutive decline and the longest losing streak in at least 22 years.
Traders have to set aside $600 a metric ton to trade copper, up from $530, starting Jan. 28, LCH.Clearnet Ltd. said yesterday. Margins were also raised for nickel and tin.
Fuente: http://www.bloomberg.com/news/2011-01-2 ... emand.html