Farallon Resources Ltd. (fka FRLIF)

[the cork]

Zinc little changed, Copper Declines for Second day on Speculation China Curbs May Crimp Demand
By Glenys Sim - Sep 15, 2010 8:53 PM PT

Copper dropped for a second day, erasing an early advance, on speculation that China may add to tightening measures, raising concern that economic growth may slow in the biggest metals user. Lead and tin also fell.

The three-month contract on the London Metal Exchange declined as much as 0.3 percent to $7,596 a metric ton after earlier gaining as much as 0.4 percent. The metal, which traded at $7,607 at 11:46 a.m. in Singapore, dropped yesterday after economic data in the U.S. indicated a slowdown in manufacturing in the largest user after China.

“If China’s economic data continues to show previous measures to cool the economy haven’t worked, more steps will definitely be taken,” said Wang Weiwei, an analyst at First Futures Brokerage Co.

China’s regulator may require the nation’s biggest banks to boost capital-adequacy ratios to as much as 15 percent by 2012, a person with knowledge of the matter said yesterday. This will slow loan growth to a pace that more closely matches economic expansion, according to Goldman Sachs Group Inc.

China’s authorities earlier this year boosted requirements for bank reserves three times and introduced real-estate curbs in an effort to cool lending and speculation. Copper is used in electrical wiring and pipes.

U.S. Manufacturing

Industrial production in the U.S. cooled in August to 0.2 percent after a 0.6 percent gain in July, figures from the Federal Reserve showed yesterday. A separate report showed manufacturing in the New York region expanded this month at the slowest pace in more than a year.

Copper for December delivery on the Shanghai Futures Exchange lost as much as 0.4 percent to 58,830 yuan ($8,737) a ton, after gaining as much as 0.5 percent earlier. China’s financial markets are closed from Sept. 22 to Sept. 24 for the Mid-Autumn festival holiday, and again from Oct. 1 to Oct. 7 for the National Day holiday.

“The market will continue to be rangebound at least until after the Chinese holidays in October,” said Wang.

Aluminum in London decreased 0.4 percent to $2,146.50 a ton, lead dropped 0.6 percent to $2,225 a ton and zinc was little changed at $2,144.50 a ton. Nickel declined 0.5 percent to $23,100 a ton and tin lost 0.4 percent to $23,070 a ton.

http://www.bloomberg.com/news/2010-09-16/copper-pares-gain-as-u-s-data-raises-concerns-about-strength-of-recovery.html