Copper Prices Drop to Lowest Since January 2006 on Economy

By Millie Munshi

Oct. 16 (Bloomberg) -- Copper futures dropped in New York to the lowest price since January 2006 on concern that a deepening global slowdown will curb demand for the metal used in pipes and wires.

China's industrial output in the first nine months slowed compared with the figure through August, an industry report showed today. U.S. ``economic activity will fall short of potential for a time,'' Federal Reserve Chairman Ben S. Bernanke said yesterday in a speech. Before today, copper plunged 48 percent from a record in May on signs of reduced consumption.

``There's continued concerns about recession and it will be affecting demand for copper,'' said Patrick Chidley, an analyst at Barnard Jacobs Mellet in Stamford, Connecticut. ``This will continue to weigh on the price.''

Copper futures for December delivery fell 4.55 cents, or 2.1 percent, to $2.165 a pound at 9:51 a.m. on the Comex division of the New York Mercantile Exchange. Earlier, the metal touched $2.0405, the lowest since Jan. 6, 2006.

China's industrial output rose 15.2 percent this year through September, the China Electricity Council said today in a statement. The measure was 15.7 percent through August, government data show. China is set to release nine-month economic data on Oct. 20.

On the London Metal Exchange, copper for delivery in three months dropped $100, or 2 percent, to $4,820 a metric ton ($2.19 a pound).

To contact the reporter on this story: Millie Munshi in New York at mmunshi@bloomberg.net.