Copper, Aluminum Fall to Three-Month Lows on China Data

Copper and aluminum fell to three- month lows on signals that manufacturing may sag in China, the world’s biggest consumer of industrial metals.

Two gauges of Chinese manufacturing showed a pace of expansion that was lower than analysts estimated, signaling the nation’s economic recovery may be losing steam. Combined copper inventories monitored by exchanges in Shanghai, London and New York have climbed to the highest since May 2010.

“The China numbers came in below expectations, and that implies that manufacturing and copper demand in that country aren’t going to be particularly robust for the next little while,” Bart Melek, the Toronto-based head of commodity strategy at TD Securities, said in a telephone interview. “Inventories in Europe and Asia are rising.”

Copper futures for May delivery dropped 1.3 percent to settle at $3.501 a pound at 1:18 p.m. on the Comex in New York. Earlier, the price touched $3.4725, the lowest for a most-active contract since Nov. 19.

On the London Metal Exchange, aluminum for delivery in three months fell 1.5 percent to $1,975 a metric ton. Earlier, the price touched $1,956, the lowest since Nov. 23. The metal dropped for the 10th straight session, extending the longest slump since June.

Copper on the LME fell 1.4 percent to $7,703 a ton ($3.49 a pound). Lead, zinc and tin also dropped, while nickel rose.

In a report titled “Buying the Dip,” Goldman Sachs Group Inc. said today that copper will rebound as China’s imports pick up and the U.S. housing market recovers. The price may rise to $9,000 a ton in six months, the bank said.

Industrial metals and energy led commodities lower today. The Standard & Poor’s GSCI Spot Index of 24 raw materials erased this year’s gain.

To contact the reporter on this story: Joe Richter in New York at jrichter1@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net