METALS-Copper falls to more than 2-week low on China demand worries
* China property fears send ShFE copper to over-3-month low
* Rise in new housing prices decelerates in January
* Banks start to tighten lending to property sector -media (Updates with closing prices)
By Susan Thomas and Harpreet Bhal
LONDON, Feb 24 (Reuters) - Copper fell on Monday to its lowest in more than two weeks as data showed growth in new housing prices in China slowed in January and worries about credit restrictions in the country's huge property sector hurt the demand outlook for metals.
China accounts for more than 40 percent of global consumption of copper, which is used extensively in construction and power cables. Any curbs to financing and property development are likely to erode that demand.
Three-month copper on the London Metal Exchange ended at $7,077 a tonne, down from a close of $7,155 on Friday. Earlier in the session it hit an intraday low of $7,033, its lowest since Feb. 6.
New housing prices in China rose 9.6 percent in January from a year earlier, but the rate decelerated month-on-month for the first time in just over a year.
"That was the main reason why we saw weakness in copper but also across the board in base metals," Vicky Sanders, head of analytics sales at Marex Spectron, said. "It was only a small change month-on-month but it's really about momentum."
Furthermore, she said, local news reports suggested that banks had started to tighten lending to the property sector and related industries.
The official Shanghai Securities News reported on Monday that Industrial Bank and other banks may have stopped extending some loans to property developers and tightened lending to other property-related sectors such as steel, cement and construction.
Local media reported that several banks had issued denials.
Copper prices have traded in a narrow range just above $7,000 per tonne since August, and traded in a $200 range for most of February.
"Base metals have been relatively tepid since August last year. So volatility will attract activity and it's good to see some response in base metals," Sanders said.
"In copper, we're still at the lower range of what we've been in, but if we were to break through $7,000 then we might see volumes pick up within days."
Tighter monetary policies in China and the United States have fanned concerns there will be less cheap liquidity on hand for industry and investors, compounding worries that stuttering growth in the world's top two economies could derail a global recovery.
In the United States, growth in the services sector as well as the pace of hiring slowed in February, an industry report showed on Monday, the latest data to suggest an unusually cold winter was dragging on economic activity.
"Although developments in China continue to be the main focus of the metals markets, the geopolitical turmoil evident in a number of emerging markets still has the potential to generate additional volatility in the weeks ahead," said Ed Meir, analyst at INTL FCStone.
Metals prices could still climb, however, driven by technical buying, Barclays said in a research note.
"Sizeable short positions have built in copper, zinc and nickel, leaving the market vulnerable to short-covering rallies and raising the prospect of big rises in reported inventories if metal is attracted on-warrant by tightening in time spreads," the bank said in the note.
In industry news, some big aluminium producers have pushed up their proposed premiums on primary metal to Japanese buyers by 45-47 percent to a record $370-$375 per tonne for April-June shipments, four sources involved in quarterly pricing talks said.
LME benchmark three-month aluminium ended at $1,762 a tonne from a last bid on Friday of $1,770.
Zinc closed at $2,041 from $2,040 on Friday and lead ended at $2,132 from $2,150. Both metals hit their lowest levels in almost two weeks in intraday trade.
Tin closed at $22,975 from $23,140 and nickel ended at $14,330 from $14,365. Both metals earlier hit their lowest levels in more than a week in intraday trade.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel