Now China feels the pain as property crisis bites

New data suggests the property crisis is spreading to China, adding to concerns that commodities prices will come under greater pressure.

Beijing-based information service Xinhua Finance says today the property industry is facing a painful adjustment that "is likely to extend over a significant period of time".

The Chinese building boom has supported record prices of commodities, but concerns about growth has led to sharp declines, especially for copper, nickel and aluminium, that have caught traders and hedge funds by surprise.

RK Capital Management, a US-based metals hedge-fund lost as much as 30% last month amid falling copper and aluminium prices, an investor with the firm said today.

Last week, one of the world's best-known hedge fund managers, Dwight Anderson, was forced to close his flagship fund at Ospraie Management — 20%-owned by Lehman Brothers — after it lost 39% this year.

The London Metal Exchange Index of six industrial metals fell 6.6% last month and is down 3.6% this year.