By Maria Kolesnikova Feb. 18 (Bloomberg) -- Copper fell in New York, extending a weekly drop, after China raised banks’ reserve requirements for a second time this year to curb inflation. Reserve ratios will increase 0.5 percentage point starting Feb. 24, the People’s Bank of China said on its website today. Interest rates rose 10 days ago in the country, the world’s biggest copper consumer. Inflation accelerated to 4.9 percent in January, exceeding the government’s 2011 target for a fourth month. The increase “is a reminder of the measures that the Chinese authorities are taking to prevent overheating in the economy,” said Daniel Major, an analyst at RBS Global Banking & Markets in London. Copper for May delivery dropped 2.35 cents, or 0.5 percent, to $4.4735 a pound at 7:58 a.m. on the Comex in New York. Prices are down 1.4 percent this week. Copper for three-month delivery was little changed at $9,808 a metric ton on the London Metal Exchange, while aluminum gained the most in almost three weeks. “Raising the reserve requirement ratio is not the same as hiking interest rates,” said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt. “In past months, any price dip following monetary tightening in China was short-lived. It remains to be seen whether it’s different this time.” Car Sales Copper also slid as growth in China’s passenger-car sales slowed in January. Sales increased 16.2 percent from a year earlier, the China Association of Automobile Manufacturers said today, below the 18.6 percent rate in December. Even a small car contains 15 kilograms (33 pounds) of copper, according to the Copper Development Association. Prices reached a record $10,190 a ton this week in London. “We expect Chinese demand for commodities to remain robust in 2011, but would be wary about chasing prices higher from currently elevated levels,” RBS’s Major said. Aluminum for three-month delivery on the LME added as much as 1.6 percent, the most since Feb. 1, and was last up $31, or 1.2 percent, at $2,543 a ton. Stockpiles of the lightweight metal monitored by the Shanghai Futures Exchange fell for the first week in three, dropping by 4,378 metric tons to 426,978 tons, according to weekly exchange data. Inventories tracked by the London Metal Exchange slipped this week. $2,490 a Ton “Lower Shanghai stocks helped sentiment in the morning,” said Andrey Kryuchenkov, an analyst at VTB Capital in London. “The market held above the key support level of $2,490.” Smaller inventories suggest buying has continued to pick up after China’s weeklong Lunar New Year holiday through Feb. 8, Marc Elliott, an analyst at Fairfax IS in London, said in a report. LME stockpiles of aluminum, used in products from beverage cans to aircraft, fell 0.1 percent to 4.59 million tons this week, according to the exchange. They’re up 7.4 percent this year. Copper stockpiles in Shanghai gained for a third week, jumping 12 percent to 161,062 tons, the Chinese exchange said today. LME copper stockpiles, up 8 percent this year, climbed 2.8 percent this week to 407,925 tons, the highest level since Aug. 13. Orders to draw copper from LME stocks, or canceled warrants, rose for a fifth day today to 17,650 tons. Zinc for three-month delivery on the LME gained 1.1 percent to $2,540 a ton. Stockpiles expanded to a record 332,302 tons, the Shanghai exchange said. Tin rose 0.4 percent to $31,775 a ton, lead gained 1.1 percent to $2,613 a ton and nickel added 0.3 percent to $28,564 a ton. --With assistance from Helen Sun in Shanghai and Sophie Leung in Hong Kong. Editors: Dan Weeks, John Deane. 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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