Market and product

MUMBAI (Commodity Online): Copper futures on India's MCX and Globex platform of Comex continue to slide as China growth is threatened by a credit crunch which gave surprise negative shocks to investors around the globe. The nation is the biggest consumer of copper in the world and the second largest economy in the planet.

MCX copper for delivery on June 28 was seen trading at Rs.394.65 a kilogram, a loss of 1.53% as of 10.32 AM IST. Copper on the Comex for delivery on September 13 was spotted trading at $2.991 a pound, a loss of $0.048 or 1.59% as of 10.44 AM IST.

The Shnaghai Composite Index too dropped 5% to touch the lowest since January 2009.

Days back the China's inter-bank lending rate—Shibor rate-- climbed to 13% as the People's Bank of China, China's central bank refrained from injecting liquidity into the system. The economy apparently has hit the brakes on economic growth in a bid to make it much more sustainable.

Currently, Chinese economy with growth projections in excess of 7% is overheated and the unregulated shadow banking has added to credit woes.

Chinese wealth management products linked to infrastructure development is said to have created a sub-prime lending boom there and coupled with lending by banks which is often not registered in the balance sheets of the banks there have added to worries related to the so-called growth engine of the world.

China's Everbright Bank defaulting on a 6-billion-yuan interbank loan on June 6 has aggravated the situation and has contributed significantly to worries.