Copper fell for a second day in New York on concern that China, the world’s biggest consumer of the metal, may take more steps to restrain the economy after growth sped up. Expansion accelerated to 9.8 percent in the fourth quarter, a statistics bureau report showed, topping estimates in a Bloomberg News survey of economists. Consumer-price inflation eased to 4.6 percent in December. China’s central bank raised interest rates on Christmas Day in an effort to cool the economy. “The Chinese economy is at risk of overheating,” Commerzbank AG said in a report today, “Fears that further measures could be introduced to fight inflation and cool the local economy, which could result in lower demand for commodities, have gained the upper hand with market players.” Copper for delivery in March fell 7.25 cents, or 1.7 percent, to $4.2975 a pound at 7:55 a.m. on the Comex in New York. Copper for delivery in three months dropped 1.6 percent to $9,426 a metric ton on the London Metal Exchange. All of the six main metals traded on the LME slid except tin. Inflation in China may peak at as much as 6 percent in the first half, according to Citigroup Inc. and Credit Suisse Group AG. Metals supply is adequate in the country and a “price spike” is unlikely before the Lunar New Year, Goldman Sachs Group Inc. said in a report Jan. 17. The week-long holiday begins Feb. 2. ‘Quiet’ Market “China is buying very little,” said Andrew Silver, a trader at Natixis Commodity Markets Ltd. in London. “The copper market is quiet.” Copper production in China rose to all-time highs for December and for 2010 on ample raw-material supplies and record prices, according to the National Bureau of Statistics. Smelters produced 444,000 tons in December, and annual output was 4.79 million tons. Prices also fell today as BHP Billiton Ltd., the biggest mining company, said its copper production was “higher than all comparable periods” in the six months through December. Record milling rates at Olympic Dam in Australia and Antamina in Peru helped output, BHP said in a statement. “Despite a supportive demand outlook, after two years of impressive price gains for base metals, we believe increased volume will limit significant price upside from current levels in 2011 but expect further gains 2012-14,” said Daniel Major, an analyst at RBS Global Banking & Markets in London. LME copper added 30 percent last year after more than doubling in 2009. Mine Production Copper demand will outstrip supply for the next two years as the economy recovers, China sustains consumption and mine output drops, Japan’s top producer said. Demand will likely exceed supply by 635,000 tons this year, Hidenori Kamoo, general manager of the marketing department at Pan Pacific Copper Co., said in an interview on Jan. 18. Orders to draw copper from LME stockpiles, or canceled warrants, fell 2.4 percent to 30,925 tons, daily exchange figures showed. LME copper inventories slipped 0.3 percent to 380,525 tons. Stocks are up 0.8 percent this year, compared with increases of 4.9 percent for aluminum, 6.1 percent for tin and a 27 percent jump for lead. “From a fundamental perspective, there have been some significant increases in LME inventories in the early weeks of 2011, and the price weakness we are seeing is likely to be prices catching up with the negative impact of these inventory gains,” Major said. Lead for three-month delivery on the LME slid 2 percent to $2,480.25 a ton. LME inventories gained for a fourth day to 264,350 tons. Prices reached the highest intraday level since May 2008 on Jan. 6. Tin rose 0.2 percent to $26,930 a ton and aluminum slid 1.2 percent to $2,399.75 a ton. Nickel lost 0.2 percent to $25,610 a ton and zinc dropped 2 percent to $2,341.50 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.

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