April 29 (Bloomberg) -- Copper and aluminum prices fell to their lowest in at least a month, extending yesterday's declines, after China signaled it would slow the economy in the world's fastest-growing market for the metals.

Prices of copper, aluminum and other raw materials have risen too rapidly, Chinese Premier Wen Jiabao told Reuters. The government wants to slow growth to less than 8 percent this year from 9.1 percent last year, after a boom in building, electronics and auto output pushed prices of copper, aluminum and steel to their highest in at least eight years in March.

``Chinese growth was a pillar of high base metal prices and the introduction of credit controls has unnerved the market,'' said Adam Beamond, a dealer at client sales at N.M. Rothschild & Sons (Australia) Ltd. in Sydney.

Copper futures in New York fell as much as 1.3 percent to $1.1615 a pound, adding to yesterday's 5 percent decline. The futures are 17 percent down from their eight-year closing high on March 1. Copper for October delivery in Shanghai, the most active contract, fell 500 yuan, or 2.1 percent, to 23,640 yuan ($2,856) a metric ton in the morning session. Aluminum in Shanghai fell to 16,970 yuan from yesterday's 17,190 yuan.

State-owned Bank of Communications Ltd., Shenzhen Development Bank and Shanghai Pudong Development Bank yesterday said they halted lending until May 1, the start of a weeklong holiday in China, as the government tightens controls on lending. China Central Bank vice-governor Wu Xiaoling called for banks to cooperate with curbs on credit, forecasting growth will slow to less than 8 percent this year.

Knock-On

China tried to slow steel use by reducing the amount companies can borrow for steel projects from 75 percent of the value to 60 percent, state-run television said yesterday, citing China's State Council.

``With China accounting for about 25 percent of global demand for copper, 19 percent for aluminium and 20 percent for nickel, any slowing in the country's voracious appetite for metals could have an adverse impact on supply/demand and prices,'' Robin Bhar, a base metals analyst at Standard Bank in London, said in an e-mailed report.

Australia's BHP Billiton, the world's biggest miner, and South Korea's Posco, the nation's biggest steelmaker, led Asian stocks lower on concerns Chinese demand will slow.

Stocks

Shares of BHP Billiton, which mined 6.5 percent of the world's copper ore last year, fell as much as 3.4 percent to an 11-week low of A$11.52 on the Australian Stock Exchange. They traded at A$11.57 at 1:49 p.m. Sydney time. Posco, South Korea's biggest steelmaker, shed 9,500 won, or 6.1 percent, to 146,500.

Shares of London-based Rio Tinto Group, which owns 30 percent of Chile's Escondida copper mine, the world's largest, fell as much as 3 percent to a seven-month low of A$32.16. WMC Resources, whose Olympic Dam mine in South Australia contains the world's eighth-largest copper reserve, dropped as much as 5.1 percent, to A$4.68.

Jiangxi Copper Co., China's biggest copper producer, fell as much as 8.1 percent. The stock has fallen 13 percent in the past week. China Aluminum Corp., the nation's biggest aluminum maker, fell as much as 8.6 percent.

Shares of Phelps Dodge Corp., the world's biggest publicly traded copper miner and refiner, yesterday fell $1.99, or 2.9 percent, to $66.89 in New York Stock Exchange composite trading, the lowest closing price since Dec. 10. Grupo Mexico SA, the world's third-biggest copper refiner, yesterday fell 3.17 pesos, or 8.5 percent, to 34.14 pesos.

Finding Support

``If you have tightness in borrowing in China, you may hurt a whole bunch of commodities because the Chinese have been buyers of base metals, oil and gold,'' said George Gero, senior vice president at Legg Mason Wood Walker Inc. in New York.

Copper for July delivery on the Comex division of the New York Mercantile Exchange was trading 0.2 percent lower at $1.1740 a pound at 1:51 p.m. in Sydney. The contract in Shanghai traded down by its maximum daily limit before the low price flushed out buyers.

``The main crux for copper will be what happens in Shanghai trading today, whether the bargain hunters move in and buy or whether it keeps going down.''

Gold was caught in the fallout from the slide in other metals, with futures extending yesterday's 3.3 percent loss, their biggest since Jan. 29.

``Whilst the fall in base metals should not have affected the precious metals to such an extent, the ferocity of the fall, particularly in copper, prompted some stop loss selling in gold which soon turned into a rout as the price fell from $392 to $384 in 10 minutes,'' Martin Mayne, Rothschild's associate director of client sales said in an e-mailed report.

Fallout

Gold for June delivery on the Comex division of the New York Mercantile Exchange fell as much as $3.80, or 1 percent to $382.10 an ounce. The contract, which fell $13.20 to $385.90 yesterday, traded at $384.10 an ounce at 2:06 p.m. in Sydney.

In other metals on the LME yesterday, aluminium for delivery in three months fell $75, or 4.3 percent, to $1,660 a ton. Nickel fell $755, or 6.6 percent, to $10,700, its biggest fall since Feb. 23. Tin dropped $250 to $8,475, zinc lost $26.5 at $1,023, lead declined $30.50 to $705 and aluminum alloy dropped $45 to $1,580.

To contact the reporter on this story: Matt Chambers in Sydney at at mchambers1@bloomberg.net

Last Updated: April 29, 2004 00:34 EDT