Copper fell in London on speculation that supply is ample in China, the world’s largest consumer, and steps by the country’s government to cool economic growth may further slow demand. Metals supply is adequate in China and a “price spike” is unlikely before the Lunar New Year, Goldman Sachs Group Inc. said in a report. Metals also declined as the euro fell against the dollar on concern Europe’s debt crisis will worsen even as finance ministers meet today to hammer out a new strategy to stem the contagion. “We believe it’s too early for deficit-driven price spikes, and prices are likely at the high end of near-term ranges across the complex,” Goldman Sachs analyst Jeffrey Currie said in the report. Copper for delivery in three months dropped $61, or 0.6 percent, to $9,589 a metric ton at 9:45 a.m. on the London Metal Exchange. Copper for delivery in March declined 0.7 percent to $4.3815 a pound on the Comex in New York. All of the six main metals traded on the LME retreated except tin. The People’s Bank of China told lenders on Jan. 14 to hold more deposits as reserves, lifting required ratios for the fourth time in two months. Gains in the nation’s property prices slowed for an eighth month in December after the government expanded measures to limit the risk of asset bubbles in the world’s fastest-growing major economy. Weaker Usage Growth Growth in Chinese copper consumption may almost halve this year as government measures to restrict monetary expansion cool demand, Michael Jansen, metals strategist at JPMorgan Securities Ltd., said at a conference in Shanghai on Jan. 15. Real demand is likely to gain about 7 percent to 7.88 million tons, down from 13 percent in 2010, Jansen said. China’s copper demand growth may be at least 6 percent this year compared with 10 percent in 2010, Bonnie Liu, an analyst at Macquarie Group Ltd., said at the same conference. Demand may reach 7.74 million tons, Liu said. The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, added as much as 0.5 percent. A stronger dollar saps demand for raw materials as an alternative investment and makes metals priced in the currency more expensive in terms of other monies. Orders to draw copper from LME stocks, or canceled warrants, fell for a fourth day today, dropping 2.4 percent to 31,875 tons, daily exchange figures showed. Copper inventories gained 0.7 percent, the most since Dec. 30, to 379,000 tons. Fewer Bullish Bets Hedge-fund managers and other large speculators decreased their net-long position in New York copper futures in the week ended Jan. 11, according to U.S. Commodity Futures Trading Commission data. Speculative long positions, or bets prices will rise, outnumbered short positions by 30,107 contracts on the Comex, the commission said Jan. 14. Net-long positions fell by 1,506 contracts, or 5 percent, from a week earlier. Nickel for three-month delivery on the LME slid 0.9 percent to $25,649 a ton. “We still see strong downside risks to nickel prices as the year progresses,” said Currie of Goldman Sachs. Tin added 0.1 percent to $26,890 a ton. The best performer last year among the six main LME metals may rally to a record $40,000 as global supply might lag behind demand until at least 2013, according to Malaysia Smelting Corp. Prices reached an all-time high of $27,500 on Nov. 9. Aluminum declined 0.7 percent to $2,454 a ton, lead fell 0.6 percent to $2,663 a ton and zinc dropped 0.6 percent to $2,442 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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