Copper fell from a record price in London on concern that interest rates may rise in China, the world’s biggest consumer of the metal, potentially curbing demand. China’s government brought forward the release of November economic data to Dec. 11, heightening speculation the central bank will increase borrowing costs this weekend. Copper also fell as renewed tensions on the Korean peninsula pulled equities lower and helped the dollar to climb, making metals priced in the currency more expensive in terms of other monies. “A stronger dollar and weaker equities are hitting metals,” Marc Elliott, an analyst at Fairfax IS in London, said by telephone. “Things are looking a bit bearish today.” Copper for delivery in three months dropped $100, or 1.1 percent, to $8,780 a metric ton at 9:45 a.m. on the London Metal Exchange. Prices reached a record $9,044 yesterday, climbing for a sixth day. Copper for delivery in March fell 1 percent to $4.01 a pound on the Comex in New York. “Copper did hit a record, so there is also a bit of profit-taking,” Elliott said. China’s statistics bureau will release November figures on inflation, retail sales, industrial output and fixed-asset investments this week. Expectations of another interest-rate increase have grown after the ruling Communist Party said Dec. 3 the country will shift to a “prudent” monetary policy next year as the government seeks to combat accelerating inflation. Artillery Fire Yonhap News reported that North Korea fired artillery shells near the disputed border on the peninsula, two weeks after an attack on the South’s Yeonpyeong island killed four. The MSCI World Index of shares fell as much as 0.6 percent as the U.S. Dollar Index, a six-currency gauge of the greenback’s strength, added as much as 0.7 percent. A stronger dollar also saps demand for raw materials as an alternative investment. Copper also fell as unionized workers at Anglo American Plc and Xstrata Plc’s Collahuasi venture in Chile were set to return to work after voting to end a month-long strike at the world’s third-largest copper mine. Prospects of an output cut helped to lift copper last month. The metal has gained 19 percent this year, helped by a 30 percent drop in London Metal Exchange stockpiles, which are on course for the first annual decline since 2004. Today they shrank to 350,250 tons as orders to draw copper from inventories, or canceled warrants, fell 4.5 percent to 26,075 tons, according to daily exchange figures. Copper Premium Immediate-delivery LME copper’s premium to three-month metal rose 14 percent to $34.50 a ton, rebounding from yesterday’s drop of 34 percent. Prices moved on Nov. 8 to a so- called backwardation, when nearby metal trades above longer-term contracts, potentially signaling supply concern. The fee to borrow copper for next-day delivery, the so- called tom-next spread, was last at a discount of 60 cents, compared with yesterday’s closing $3 discount. An increase in the fee would indicate tightening supply. Codelco, the world’s largest copper producer, expects prices to average near $4 a pound next year as demand rises, Chief Executive Officer Diego Hernandez said in an interview yesterday. The copper market probably will be in deficit by about half a million tons in 2011 as demand gains between 4 percent and 5 percent, he said. Tin for three-month delivery on the LME rose 0.6 percent to $25,350 a ton. Prices reached a record $27,500 on Nov. 9. The metal has jumped 50 percent this year, leading advances on the exchange, after production was disrupted in Indonesia and the Democratic Republic of the Congo. Aluminum declined 1.2 percent to $2,278 a ton and nickel fell 1.4 percent to $23,750 a ton. Lead fell 2.5 percent to $2,340 a ton and zinc dropped 3.1 percent to $2,233 a ton. To contact the reporter on this story: Maria Kolesnikova in Moscow at mkolesnikova@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter@bloomberg.net.

Source