Copper Prices Fall on Signs Metal Demand May Ease After Rally

Jan. 19 （Bloomberg） -- Copper prices in New York had the biggest drop in almost two weeks on signs that demand may ease after prices tripled since the end of 2008.

Inventories in warehouses monitored by the London Metal Exchange gained 1 percent today to the highest since Sept. 22. Supplies monitored by the Shanghai Futures Exchange climbed to the highest since June. Copper rose to a record in London before erasing gains.

“Rising stockpiles are keeping prices in check,” said Adam Klopfenstein, a senior strategist at Lind-Waldock, a broker in Chicago. “People are skeptical about the current price level. There may be a pullback, unless we see a big drawdown in inventories.”

Copper futures for March delivery fell 5.8 cents, or 1.3 percent, to close at $4.37 a pound at 1:16 p.m. on the Comex in New York, the largest decline since Jan. 6. The price gained 1.2 percent in the previous two sessions, partly on expanding industrial output in the U.S.

Copper for delivery in three months slid $125, or 1.3 percent, to $9,575 a metric ton （$4.34 a pound） on the LME. Earlier, the metal reached a record $9,781.

China is the world’s leading copper consumer, followed by the U.S.

Housing starts in the U.S. fell 4.3 percent in December to the lowest annual rate since October 2009, Commerce Department figures showed today. Builders are the biggest users of copper.

China’s demand for the metal may increase 6 percent this year after climbing 10 percent in 2010, Bonnie Liu, an analyst at Macquarie Group Ltd., said last week.

Aluminum, lead, nickel, tin and zinc prices also dropped in London.