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Copper Falls as Report May Show Weaker German Factory Orders

Copper fell for a third session in London before a report that may show German factory orders slid for a third month in four, fanning concern about the euro-zone crisis debt threatening to choke demand.

The Economy Ministry in Berlin may say tomorrow orders dropped 1.4 percent in November, according to economists surveyed by Bloomberg. Germany is the world’s third-biggest consumer of copper, which also declined today as the dollar strengthened against the euro, reducing the appeal of commodities as alternative investment.

“If Germany stumbles, that means the rest of Europe will really be struggling,” David Wilson, an analyst at Citigroup Inc. in London, said by phone. “This will be supportive for the dollar versus the euro.”

Copper for delivery in three months retreated 0.5 percent to $8,041 a metric ton by 10:20 a.m. on the London Metal Exchange. Futures for delivery in March fell 0.9 percent to $3.662 a pound on the Comex in New York.

Money managers increased their net-long positions, or wagers on rising copper prices, to 15,924 Comex futures and options contracts as of Dec. 31 from 14,988 a week earlier, according to the U.S. Commodity Futures Trading Commission. The number of LME copper futures outstanding reached the lowest level in almost four months on Dec. 28.

“Activity has been fairly light,” Wilson said. “We haven’t seen very much consumer activity at all. We did actually see some producers selling copper last week. That suggested things were going to run out of steam.”

Copper stockpiles monitored by the LME fell 0.3 percent to 319,400 tons, according to daily exchange figures. Inventories tracked by the Shanghai Futures Exchange reached an eight-month high of 206,458 tons, data showed last week.

Orders to withdraw copper from LME warehouses dropped 1.8 percent to 70,275 tons.

Aluminum, zinc, lead and nickel slid in London. Tin rose.

To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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