Bloomberg reported that copper fell the most in a month in Shanghai, tracking an overnight drop in London and New York after the Chinese government said it plans to tighten rules on personal loans. Copper and zinc declined after the China Banking Regulatory Commission announced a draft rule aimed at ensuring loans enter the real economy instead of being used for speculation. The measure was announced after the close of trade. Mr Lu Wei an analyst at Jiangsu Holly Futures Brokerage Company said that “The market managed to rally in the middle of a slowdown thanks to the availability of credit. People who have no business buying copper were said to be making purchases and driving prices higher and this may all come to an end soon.” January delivery copper on the Shanghai Futures Exchange fell as much as 2.7% to CNY 49,900 per tonne, the biggest intraday drop since September 28th 2009 and the lowest price for a most active contact since October 21st 2009. Zinc futures lost as much as 2.9%, the most since September 14th 2009 and ended the day down 2.7% at CNY 16,465 per tonne. Copper for delivery in 3 months on the London Metal Exchange was little changed at USD 6,432 per tonne after dropping 2.3%, the largest decline in almost a month. Copper prices have more than doubled this year as China’s USD 586 billion stimulus package and record lending spurred raw material purchases. Mr Lu said that “We’re seeing risk being pulled from all markets, not just metals.” A report showed that US new home sales unexpectedly fell 3.6% in September. Builders are the biggest copper users in the US, where government tax credits for first time home buyers will end next month. The US and China are the 2 largest consumers of the metal used in construction and automobiles. Among other LME traded metals, aluminum and lead were little changed at USD 1,908.50 per tonne and USD 2,232 per tonne respectively. Zinc fell 0.5% to USD 2,178.75 per tonne, nickel declined 0.4% to USD 17,730 per tonne and tin slipped 0.3% to USD 14,600 per tonne.

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