Copper Declines on Signs China¡¯s Demand Is Slowing With Economy

Copper fell in Asia on speculation demand in China, the largest consumer of the metal, will slow further.

Consumer prices in the world¡¯s fourth-largest economy rose 2.4 percent in November, the slowest pace in almost two years, the statistics bureau said today. Imports of copper and copper products slid 6 percent to 217,214 metric tons from October, according to a preliminary report from customs yesterday.

¡°Given the weak economic outlook, the environment for commodities should remain difficult in the months ahead,¡± Credit Suisse Group analysts led by Anja Hochberg, wrote in a report. Copper will likely trade between $3,000 and $3,200 a ton by the end of the first quarter, the bank said.

London Metal Exchange copper fell as much as 2.1 percent to $3,235 a ton, and traded at $3,275 at 3:32 p.m. Singapore time. A drop in the dollar helped the metal jump 3.3 percent yesterday, even as stockpiles at London Metal Exchange warehouses climbed to 303,600 tons, the highest since February 2004.

March-delivery copper on the Comex division of the New York Mercantile Exchange fell 0.4 percent to $1.4890 a pound, while copper for February delivery on the Shanghai Futures Exchange dipped 0.3 percent to end the day at 25,230 yuan ($3,683) a ton.

China consumes a quarter of the world¡¯s copper. On Dec. 15, the country will probably report industrial production growth of 7.2 percent for November, the weakest pace in nine years, based on a Bloomberg News survey of economists.

Helping limit copper¡¯s losses were a further decline in the dollar and a rally in equities. The dollar fell to a six-week low against the euro as a bill designed to prevent the collapse of U.S. automakers met with opposition in the Senate. The benchmark MSCI Asia Pacific Index rose a fifth day as governments from Australia to South Korea took steps to protect their economies from the financial crisis.

Among other LME-traded metals, zinc rose 1.5 percent to $1,121 a ton, and lead gained 3.9 percent to $1,029 a ton. Aluminum was little changed at $1,530 a ton, and nickel was unchanged at $10,300 a ton, while tin had not traded as of 3:33 p.m. in Singapore.

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