Copper prices hit 7-week low as traders brace for China curbs

HANOI: Copper prices fell on Tuesday to their lowest in more than seven weeks, as traders feared measures that the authorities in China, the biggest consumer of the red metal, would take to curb a recent price rally in commodities.

Three-month copper on the London Metal Exchange fell as much as 2.9% to $9,680 a tonne, before edging up to trade at $9,750 a tonne, still down 2.2%, as of 0535 GMT.

The most-traded July copper contract on the Shanghai Futures Exchange fell 1.4% to 70,150 yuan ($10,954.43) a tonne, having hit its lowest since April 23 at 69,500 yuan a tonne earlier in the session.

China's state planner last week renewed its pledge to step up monitoring of commodity prices, as domestic producer inflation hit its highest in more than 12 years.

Both copper contracts hit their record highs in May.

Markets expected China to release state reserves of copper, aluminium and zinc while also possibly trim long positions and crackdown price speculative activities.

"Markets have taken this rumour, so prices collapsed," said a copper producer.