By Anna Stablum Sept. 14 (Bloomberg) -- Copper fell for a fourth day in London, the longest losing streak since July, as increased inventories stoked concern about slowing demand. Stockpiles monitored by the London Metal Exchange rose 0.5 percent today to 319,800 metric tons, the highest since May 26. Inventories are up 7 percent this month. In Shanghai, they climbed 12 percent last week to 97,396 tons, the most since June 2007. “The buildup of inventories is weighing on prices,” Leon Westgate, an analyst at Standard Bank Group Ltd. in London, said in a report. “There was a period when people were confident about an economic recovery and prices were going up, and after a few days of price weakness, people are nervous again.” Copper for three-month delivery fell $126, or 2 percent, to $6,124 a ton on the LME at 10:39 a.m. local time. The contract slipped 0.4 percent last week, the second drop after seven gains. Futures for December delivery shed 2 percent to $2.79 a pound in electronic trading on the New York Mercantile Exchange’s Comex division. Prices fell as the European Union’s statistics office said industrial production in the 16-nation euro area dropped 0.3 percent in July from June, more than economists forecast. Trade Dispute? Copper will average $6,020 a ton in the fourth quarter, “assuming a bit of price weakness and then picking up toward the end of the year as people start restocking again,” Westgate said. In Shanghai, copper fell by the exchange-imposed 5 percent daily limit. Investor sentiment was hurt by speculation that a possible trade dispute between the U.S. and China may derail an economic recovery, according to Shanghai Tonglian Futures Co. analyst Shi Hai. China, the world’s biggest copper user, yesterday announced a probe into alleged dumping of American auto and chicken products, two days after the U.S. placed tariffs of 35 percent on automobile tires from China. Demand from China, where the government is spending 4 trillion yuan ($585 billion) to stimulate the local economy, has helped copper to more than double this year. Imports of copper and products by China fell 20 percent in August from a month earlier to 325,098 tons, the Beijing-based customs office said on Sept. 11. Imports more than doubled in the first half. U.S. Economy In the U.S., the second-largest copper consumer, an economic recovery may be the slowest since World War II even if economists’ more optimistic forecasts for expansion turn out to be right, said Bruce Kasman, chief economist at JPMorgan Chase & Co. The slump this time was so deep that the 3.5 percent average quarterly growth rate he sees in the next year won’t be enough to bring gross domestic product back to its $13.42 trillion pre- crisis peak, Kasman said. That’s in contrast with the last 10 recoveries, when GDP returned to its previous levels within 12 months. Europe’s economy probably returned to growth in the current quarter after governments spent billions of euros to pull the region out of the worst recession in more than six decades, the European Union said in an updated forecast. The end of the recession “only signifies that economic activity levels have hit bottom,” Jeffrey Currie in London and other Goldman Sachs Group Inc. analysts wrote in a research note dated yesterday. Still, “with the economic expansion still largely ahead of us, we expect commodity levels to rise,” they said. Rising demand and “limited production growth will push key commodities such as oil and copper into deficit in the near-to- medium term, lending substantial support to prices and returns,” Goldman Sachs said. The bank expects LME copper to rise to $7,650 a ton by the end of next year, the report shows. Among other LME metals for three-month delivery, lead fell 0.2 percent to $2,060 a ton, aluminum shed 1.6 percent to $1,815 a ton and tin eased 1.7 percent to $14,150 a ton. Nickel fell 2.4 percent to $16,550 a ton, and zinc dropped 2.8 percent to $1,815 a ton.

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