Copper Tumbles Most in Seven Months on Bets Demand to Sag

Copper futures tumbled the most in seven months as signs of muted inflation signaled lower metal demand in China, the world’s top user, and the U.S., the second-biggest.

In September, Chinese consumer costs rose at the slowest pace since January 2010, and U.S. wholesale prices unexpectedly fell for the first time in a year, separate reports showed today. Copper fell 6.1 percent in the third quarter amid concern that supplies will top demand.

The global market will swing to a surplus next year, the International Copper Study Group estimates. Even with signs of slowing demand, mining companies are spending more to increase production. Inventories monitored by exchanges in London, New York and Shanghai increased in five of the past six weeks.

“Another round of concerning data on the economic front is weighing on copper,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview. “Slower growth means a deflationary environment, which by definition is lower pricing, and lower prices puts pressure across the whole commodity market.”

Copper futures for December delivery tumbled 2.6 percent to settle at $3.009 a pound at 1:15 p.m. on the Comex in New York, the biggest decline for a most-active contract since March 11.

Demand will top refined production by 307,000 metric tons in 2014, the International Copper Study Group said yesterday. The shortfall will end next year, with output exceeding usage by 393,000 tons, the group estimates.

Rising Inventories

Stockpiles tracked by the London Metal Exchange climbed for the third straight day, the longest string of gains in a month. Retail sales in the U.S. dropped more than forecast in September, a government report showed today, adding to demand concerns.

Copper for delivery in three months fell 2.3 percent to $6,641 a ton ($3.01 a pound) on the LME.

Tin declined 0.2 percent to $19,610 a ton. The metal will trade from $20,000 to $21,500 this quarter, according to Sucden Financial Ltd. Prices will be supported as Indonesia’s ore-export ban stays in place and spurs supply deficits, Steve Hardcastle, head of client liaison, said yesterday.

Aluminum, nickel, lead and zinc also dropped.

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