By Glenys Sim Oct. 21 (Bloomberg) -- Copper and zinc tumbled by the exchange-imposed daily limit in Shanghai after China's economy expanded at the slowest pace in five years, potentially reducing demand from the world's largest consumer of copper. China's gross domestic product grew at a 9 percent annual rate in the third quarter, the weakest performance since 2003, the national statistics bureau said in Beijing yesterday. A ``general pessimistic outlook in the country'' will continue to weigh on prices, said Great Wall Futures Co. analyst Li Rong. ``We're starting to see cases of importers and fabricators canceling some long-term contracts after prices fell so much in the past few weeks,'' Huang Shoufeng, an analyst at Jinrui Futures Co., said from Shenzhen today. ``They are also not willing to take delivery on inventory which may build up if demand continues to weaken.'' Copper for January delivery on the Shanghai Futures Exchange dropped by 1,550 yuan, or 4 percent, from the previous settlement price, to 37,160 yuan ($5,437) a metric ton at 10:06 a.m. local time. The metal has slumped 37 percent since the start of the year. Three-month delivery copper fell as much as 1.3 percent to $4,660 a ton on the London Metal Exchange at 10:23 a.m. Singapore time. Chinese copper importers pay a 20 percent deposit on their orders, and now that prices have fallen by more than that amount, some are choosing to forego the metal instead of purchasing it at previously agreed high prices, according to Pang Ying, an analyst at Shenzhen Rongtuo Trading Co. Zinc Declines January-delivery zinc in Shanghai also fell by its limit to 10,210 yuan a ton, and three-month zinc on the LME was little changed at $1,206 a ton at 10:24 a.m. Singapore time. ``It is possible that zinc inventories could once again build as operators put material into a market that doesn't really need it or want it,'' Michael Jansen, JPMorgan Securities Ltd.'s London-based analyst, said in an e-mail yesterday. Jansen expects zinc supply to exceed demand by 400,000 tons next year. Stockpiles of the metal used to galvanize steel stood at 170,050 tons yesterday, nearly three times the amount a year ago. Among other LME-traded metals, aluminum was little changed at $2,135 a ton, and tin added 0.6 percent to $12,400. Nickel and lead had not traded as of 10:29 a.m. in Singapore. To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net

Source