Sept. 9 (Bloomberg) -- Copper fell, halting a four-session rally, after inventories rose and a larger-than-estimated plunge in U.S. consumer borrowing cast doubt on the strength of the economic recovery. Stockpiles of copper monitored by London Metal Exchange rose 0.4 percent today to the highest since May. Consumer credit fell for a sixth month in the U.S., the longest decline since 1991, as banks in the world’s second-biggest copper consumer restricted lending. The record $21.6 billion drop, reported yesterday by the Federal Reserve, was more than five times larger than economists forecast in a Bloomberg News survey. “The consumer is very cautious, traumatized both by imploding equity and housing prices, as well as legitimate fears about losing employment,” Edward Meir, a metals analyst at MF Global Ltd., wrote today in a report. He predicted a “modest” decline in metals prices this month and next. Copper futures for December delivery fell 3.05 cents, or 1 percent, to $2.9255 a pound at 11:03 a.m. on the New York Mercantile Exchange’s Comex division. On the LME, copper for three-month delivery slid 1 percent to $6,410 a metric ton. “If trade fails to push over $2.99 a pound in short order, look for prices to pull back and test $2.90 support,” Ralph Preston, a Heritage West Futures Inc. analyst in San Diego, said by e-mail. “The copper market is bullish and a close over $2.99 should ignite a rally to test $3.13 weekly resistance.” China Demand Copper has more than doubled this year, helped by record first-half imports by China, the world’s largest consumer of the metal. The LME Index of six metals is up 73 percent this year. Shipments of refined copper to China dropped 23 percent in July from June, when imports reached a record. “Upward momentum in prices will be difficult to maintain in the face of an expected fall off in Chinese metals import volumes,” Frederic Lasserre, head of commodities research at Societe Generale SA in Paris, wrote today in a report. Copper may average $5,900 a ton next year in London, up from $4,572 so far in 2009, on “steady” demand, MF Global’s Meir said. Among other metals for three-month delivery on the LME, lead fell as much as 1.7 percent. Yesterday, lead touched $2,517.25, the highest price since May 7, 2008. The metal, used mainly in batteries, has led gains this year on the LME, partly on concern about reduced output capacity in China. Smelters have been shut for environmental reasons and after at least three recent incidents involving lead poisoning in children. Plants capable of producing at least 500,000 tons of lead a year are being probed, according to Standard Chartered Plc. The country produces about 4 million tons of lead a year, almost half of the world’s output of 8.5 million tons, the bank said. Tin fell as much as 1.8 percent, and aluminum, zinc and nickel also declined on the LME. To contact the reporters on this story: Anna Stablum in London at astablum@bloomberg.net; Halia Pavliva in New York at hpavliva@bloomberg.net.

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