By Chanyaporn Chanjaroen Oct. 27 (Bloomberg) -- Copper fell for a second day in New York and London on speculation this month’s rally carried prices higher than justified by demand. Copper climbed yesterday as high as $3.069 a pound, the highest since September last year, and has more than doubled in 2009. World usage of the metal dropped 1.3 percent from a year earlier in the first seven months, the International Copper Study Group said Oct. 20 in a report. “Demand is still absent, there is no doubt,” said Robin Bhar, an analyst at Credit Agricole SA’s Calyon unit in London. The weaker dollar and investment flows into commodities have driven this year’s rally, he said. December-delivery copper lost 0.6 cent to $3.005 a pound on the New York Mercantile Exchange’s Comex unit as of 8:25 a.m. local time. Copper for three-month delivery slipped $15 to $6,595 a metric ton on the London Metal Exchange, rebounding from a drop of as much as 1.1 percent. The contract has added 7.3 percent this month. Any price decline is likely to be temporary, Bhar said, citing the bank’s forecast that the dollar may slump to $1.60 per euro. A weaker dollar makes metals priced in the currency cheaper for holders of other monies. The dollar was at $1.4862 per euro at 12:26 p.m. in London. Inventories Swell Stockpiles of copper tracked by the LME rose for a sixth day, increasing 0.5 percent to 370,650 tons. Including those monitored by the exchanges in New York and Shanghai, inventories totaled 520,175 tons, the highest since April 21. Growth in demand from China, the world’s largest copper consumer, may slow as the government starts to rein in credit expansion and high imports and record production swell supply, an executive at Chinalco Luoyang Copper Co. said today. “China has shown strong growth in its copper demand since last October,” said Chen Hongzhou, vice manager of the marketing department at Chinalco Luoyang, a unit of Aluminum Corp. of China. “But the momentum is likely to slow down as the government starts to rein in credit growth.” Copper imports into China more than doubled in the year’s first nine months to 2.6 million tons, customs figures show. Among other LME metals for three-month delivery, aluminum added $12, or 0.6 percent, to $2,010 a ton. Demand for the lightweight metal in the third quarter “improved somewhat after apparently reaching the bottom in the previous quarter as customers started to replenish inventories,” Norsk Hydro ASA, Europe’s second-largest aluminum producer, said today. Hydro also reported third-quarter profit unexpectedly rose almost fivefold on foreign-exchange gains. Among other LME metals for three-month delivery, tin fell $130, or 0.9 percent, at $15,125 a ton and lead added 0.2 percent to $2,315 a ton. Nickel rose 0.3 percent to $18,700 a ton, and zinc added 0.6 percent to $2,322.75 a ton. To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjroen@bloomberg.net

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