By Claudia Carpenter Jan. 29 (Bloomberg) -- Commodities headed for the biggest monthly drop in 13 months on concern that demand may wane as governments seek to control economic growth. The Standard & Poor’s GSCI Index of 24 raw materials is down 6.2 percent this month, the most since December 2008, led by slides of 16 percent for zinc and 14 percent for lead. Copper has lost 6.6 percent this month, also the most in 13 months, and crude oil is down 6.8 percent, the first decline since July. Sugar, feeder cattle and platinum climbed. Commodities last year rose the most in four decades, led by a doubling in copper, sugar and lead prices, as government spending programs spurred speculation that raw-materials demand would increase after the biggest slump in the global economy since World War II. Investors poured a record $92 billion into commodities last year, Barclays Capital estimates. “The optimism that led into 2010 has dried up very quickly,” said Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney. “Economies have been running off stimulus packages, not off genuine demand.” The Federal Reserve this week said it is taking steps to prepare investors for an end to stimulus. China started to restrict bank lending this month. Copper for delivery in three months dropped $18, or 0.3 percent, to $6,880 a metric ton at 11:53 a.m. on the London Metal Exchange. Prices have declined 13 percent from this year’s high three weeks ago. Inventories of copper in warehouses are at the highest since January 2004. China is the world’s largest buyer of copper used in pipes and wires and its purchases last year helped to support prices. ‘High Copper’ “China’s got very high copper stockpiles right now,” Charles Kernot, a mining analyst at Evolution Securities Ltd., said today by phone. “One would have to question how much more buying one can expect from them.” Crude oil for March delivery was at $73.92 a barrel on the New York Mercantile Exchange, down 12 percent from this year’s high of $84.45. Commodities also have declined as the dollar strengthened, curbing investment demand for raw materials as an alternative asset. The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, has added 1.4 percent this month after gaining 3 percent in December. Gold for immediate delivery fell 0.2 percent to $1,084.93 an ounce, down 1.1 percent this month. Investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by the metal, had dropped 1.9 percent this month as of Jan. 28, according to figures on the company’s Web site. ‘Liquidating Gold’ “Speculators are still liquidating gold, with no physical buying in sight,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said today in a report. “Bullion is still trading on the back of swinging currency markets.” Platinum, which is not in the GSCI index, has advanced 3.6 percent this month after an ETF fund was introduced in the U.S. Raw-sugar futures in New York have gained 8.9 percent this month as buyers including India, the world’s biggest consumer, compete for limited supplies. Feeder cattle, calves that are not ready for slaughter, have climbed 2.4 percent this month. Grain and soybean prices have declined this month after the U.S. Department of Agriculture raised its estimate of supplies. Corn futures have dropped 13 percent in January, wheat is down 10 percent and soybeans have slumped 11 percent. To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net

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