HANOI, Feb 1 Reuters Copper prices edged higher on Monday as investors were relieved that China, the worlds biggest metals consumer, might not be tightening credit as much as expected.
China has been tightening regulations in its property sector, which consumes a vast amount of metals, to ward off bubbles, while its banking and insurance regulator also proposed risks management measures at financial institutions.
Investors have been worried that China would further tighten liquidity in the market by raising interest rates, but the countrys central bank on Friday denied rumours that it had raised the interest rate on its standing loan facility.
The metals markets are relieved that the liquidity squeeze will be eased ahead of the Chinese New Year, even if there will be less money in the system than previous years, said commodities broker Anna Stablum of Marex Spectron.
It Chinas credit tightening is not over until its over, but the peak of the squeeze is likely to be behind us, Stablum added.
Threemonth copper on the London Metal Exchange gained 0.1 at 7,861 a tonne by 0703 GMT, having risen as much as 0.5 earlier in the session.
The mosttraded March copper contract on the Shanghai Futures Exchange closed down 0.1 at 57,910 yuan 8,965.09 a tonne. The contract rose as much as 0.7 earlier in the session to 58,350 yuan a tonne.
Worries about copper demand pressured prices after data showed Chinas factory activity in January grew at the slowest pace in months hit by a…