Copper Declines on Signs China’s Demand Is Slowing With Economy

By Glenys Sim

Dec. 11 (Bloomberg) -- 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.

To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net