By Anna Stablum Oct. 7 (Bloomberg) -- Copper fell for the first time in three days in New York and London as expanding stockpiles signaled that prices no longer reflect the outlook for demand. Inventories in warehouses monitored by the London Metal Exchange rose for a second day, extending the gain since July to 35 percent. Metal booked for delivery fell for a second day and now accounts for 2.6 percent of total inventory, down from 21 percent in May. “Fundamentals are not that great for base metals at the moment,” said Dan Smith, an analyst at Standard Chartered Plc in London. December-delivery copper shed 1.45 cents, or 0.5 percent, to $2.77 a pound as of 8:28 a.m. on the New York Mercantile Exchange’s Comex division. Copper for three-month delivery fell 0.5 percent to $6,085 a metric ton on the LME, paring its gain this year to 98 percent. Copper will average $5,500 a ton in the fourth quarter, Standard Chartered estimates. The metal will likely drop in the fourth quarter because of ample supply, according to Nexans SA, the world’s biggest maker of cables and wires. Copper premiums, added to the price of metal on the LME and a signal of demand, have shrunk, Christian Velten-Jameson, Nexans’ corporate vice-president of finance, treasury and metals, said in an interview Oct. 5. “If you look at the physical market I see pretty depressed prices over the coming months,” Paris-based Velten-Jameson said. “Prices are likely to fall this year and part of next year. It really depends on when growth will pick up.” BHP Billiton Workers at BHP Billiton Ltd.’s Spence copper mine in Chile may strike as soon as tomorrow after a labor union rejected an increased pay offer, a union official said. The mine produced 180,000 tons of copper cathode last year, or about 1 percent of the total market, according to Standard Bank Group. “Spence is likely to keep things bid, given that the union appears to have rejected the latest offer,” said David Thurtell, an analyst at Citigroup Inc. in London. A strike at Spence “is almost imminent unless there’s a last-minute miracle,” Pedro Marin, president of Chile’s Mining Federation, said yesterday. The federation represents 8,500 miners in the South American country. Copper will average $2.91 a pound next year, Citigroup Inc. said in a report, raising its previous forecast by 16 percent. Among other LME metals for three-month delivery, aluminum rose 0.6 percent to $1,832 a ton, tin was little changed at $14,600 a ton, and zinc was flat at $1,922 a ton. Nickel climbed 0.9 percent to $18,300 a ton, and lead advanced 0.5 percent to $2,160 a ton.

Source