By Anna Stablum Dec. 10 (Bloomberg) -- Copper fell for a sixth day in London, the longest losing streak in a year, as continued growth in inventories and lower Japanese machinery orders fanned concern about the strength of demand. Stockpiles tracked by the London Metal Exchange gained for a 28th day. Canceled warrants, or metal booked for removal from warehouses, slumped 33 percent to this year’s low. “It is an extremely low number and indicative of the physical market,” where demand for metals is scant, Steve Hardcastle, an analyst at Sucden Financial Ltd. in London, said by phone of the warrants. Orders declined 4.5 percent from September, the Cabinet Office said in Tokyo. Japan has the world’s second-biggest economy and is the fourth-largest copper user. Copper for three-month delivery lost $83, or 1.2 percent, to $6,862 a metric ton on the LME at 10:25 a.m. local time. The contract has slid 4.3 percent from last week’s 15-month high of $7,170. Copper for March delivery was little changed at $3.126 a pound on the New York Mercantile Exchange’s Comex unit. LME stockpiles climbed to 461,625 tons, for a 37 percent increase this year. Canceled warrants fell to 700 tons today, compared with this year’s high of 84,000 tons on April 30, after dropping 28 percent yesterday. Booked metal now accounts for less than 0.2 percent of total LME inventories, down from the 2009 high of 21 percent in May. Less Spending “We are in a run-down period to Christmas, so it is not surprising we are slowing down a bit,” Hardcastle said. The drop in Japanese machinery orders was larger than the 4.4 percent forecast in a Bloomberg survey and added to signs the nation’s rebound from its deepest postwar recession is too weak to encourage companies to spend on plant and equipment. A government report yesterday showed growth last quarter was a third of the pace initially reported as businesses cut spending. Expectations of revived demand as economies emerge from recession have helped copper to more than double this year, along with the dollar’s slump and record first-half imports into China, the world’s biggest user. The U.S. ranks second and Germany is third. Among other LME metals for three-month delivery, aluminum slipped 0.2 percent to $2,207 a ton. The contract reached $2,215 yesterday, the highest price since Oct. 20, 2008. The lightweight metal may climb to $2,700 by May, Jorge Vazquez, an analyst at Laredo, Texas-based researcher Harbor Intelligence, said in a report dated yesterday. Financing Accords Demand for physical metal is improving at a time when available inventories in LME-monitored warehouse are falling, he said. Canceled warrants have jumped 44 percent this month and now account for 3.9 percent of total stockpiles, compared with 0.5 percent at the start of the year. About 50 percent to 75 percent of aluminum inventories are tied into financing agreements, according to London-based research group CRU, curbing supply as demand rebounds. In Japan, first-quarter premiums were set at $125 to $128 a ton over the London cash price, four industry executives said. That was the highest in at least 14 years and compares to $115 to $125 a ton this quarter. Nickel shed 0.6 percent to $15,165 a ton, and zinc slipped 0.1 percent to $2,309 a ton. Lead gained 0.4 percent to $2,289 a ton, and tin was little changed at $15,270 a ton. To contact the reporter on this story: Anna Stablum in London at astablum@bloomberg.net

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