Copper fell for a second day in New York as expanding inventories of metal fueled concern about weakening demand. Stockpiles monitored by the London Metal Exchange rose to the highest level in six months, while inventories tracked by the Shanghai Futures Exchange were at the highest since June as of last week. Copper also slid before a report that may show slower growth in industrial production in the U.S., the world’s second-largest consumer of the metal after China. “With Asian LME warehouses continuing to see further inflows of metal, the market remains subdued and nervy, with all eyes on this afternoon’s U.S. industrial-production figures,” Leon Westgate, an analyst at Standard Bank Plc in London, said in a report today. Copper for May delivery fell 2.5 cents, or 0.5 percent, to $4.521 a pound at 7:45 a.m. on the Comex in New York. Copper for three-month delivery slid 1 percent to $9,910 a metric ton on the LME. Ebbing demand may be feeding stockpile gains as higher prices encourage substitution, said Nic Brown, an analyst at Natixis Commodity Markets Ltd. in London. LME copper inventories are up 7.5 percent this year. Today stockpiles climbed 0.8 percent to 405,800 tons, with the biggest gains in warehouses in Singapore and South Korea, daily LME figures showed. Orders to draw copper from stocks, or canceled warrants, jumped 23 percent, the most since Jan. 10, to 13,575 tons. Demand From China “I would certainly expect canceled warrants to push higher in the post-Chinese New Year period,” Brown said. “Chinese demand typically takes a few weeks to pick up steam, so stockpiles can increase in the near term.” Markets in China were shut for a week through Feb. 8 for the Lunar New Year holiday. Output at U.S. factories, mines and utilities increased 0.5 percent after a 0.8 percent gain in December, according to the median forecast of 80 economists surveyed by Bloomberg News. The figures are due at 9:15 a.m. New York time. Lead for three-month delivery on the LME fell 0.7 percent to $2,616 a ton. Canceled warrants almost quadrupled to 21,575 tons, the highest level since January 2004, while stockpiles were little changed at 297,250 tons after rising yesterday to the highest since March 1995. A so-called dominant position in lead slid to as much as 79 percent of LME stocks as of Feb. 14 from as much as 89 percent, the exchange said today, while one unidentified company held as much as 79 percent of nickel stockpiles. Nickel dropped 0.5 percent to $28,605 a ton. Zinc gained 0.4 percent to $2,501 a ton, tin fell 0.3 percent to $32,400 a ton and aluminum was little changed at $2,506 a ton. To contact the reporter on this story: Maria Kolesnikova in London at mkolesnikova@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter@bloomberg.net.

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