* ShFE copper hits more than 3-month low as China property worries bite
* Comex speculators cut bearish copper positions
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London copper fell sharply on Monday to its lowest in more than two weeks as worries about credit restrictions to China's huge property sector hurt the demand outlook for metals.
Copper prices have traded in a $200 range for most of February, finishing last week little changed. But worries about curbs to property development soured sentiment on Monday and may act to contain demand for metals, said Ivan Szpakowski, China commodities strategist at Citi.
China shares sank to a two-week low early on Monday, dragging Hong Kong markets down, led by property and banking counters as mainland news reports stoked fears that banks have stopped extending loans to property-related companies.
"There appears to be new developments in that the banks are lending less, and some may have stopped lending for a limited amount of time to real estate developers, to companies providing raw materials for real estate development," said Szpakowski.
Three-month copper on the London Metal Exchange <CMCU3> slid 1.2 percent to $7,073 a tonne by 0309 GMT. LME copper earlier in the day hit $7,055 a tonne, its lowest since Feb. 6.
Average new home prices in China's 70 major cities rose 9.6 percent in January from a year earlier, easing from the previous month's 9.9 percent rise, according to Reuters calculations based on official data published on Monday.
Tighter policies in China, the world's top metals user, 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, severe cold weather and a shortage of houses on the market pushed home resales to an 18-month low in January, the latest indication economic activity has hit a soft patch.
Sweeping reforms are urgently needed to boost productivity and lower barriers to trade if the world is to avoid a new era of slow growth and stubbornly high unemployment, the OECD warned on Friday.
Prices could still climb, driven by technical buying, said Barclays 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."
Selling spilled across to other metals. The most active lead contract in Shanghai hit a contract low of 13,910 yuan.