Copper declined, extending this quarter's slide to 41 percent, on signs that demand for raw materials won't recover anytime soon following a surge in U.S. unemployment.
The jobless rate in October rose to 6.5 percent, setting the stage for the steepest economic decline in decades. In the previous two days, commodities slumped 7.6 percent, the biggest drop in five decades. Manufacturing has stalled amid frozen credit markets, sending copper tumbling 60 percent from a May record.
''Copper is going to stay under pressure, given the economic outlook,'' said Frank McGhee, the head metals dealer at Integrated Brokerage Services in Chicago. ''The jobs report is adding to the bearish side.''
Copper futures for December delivery fell 2.85 cents, or 1.7 percent, to $1.697 a pound on the Comex division of the New York Mercantile Exchange. The price dropped 7.2 percent this week.
The metal extended a decline after General Motors Corp., seeking federal aid to avoid collapse, said it may not have enough cash to keep operating this year.
The metal tumbled 36 percent last month as U.S. auto sales plummeted to the lowest since January 1991. The average car uses more than 50 pounds (23 kilograms) of copper, the Copper Development Association estimates.
Earlier, copper rose as equities gained on speculation the Federal Reserve will reduce U.S. borrowing costs.
Of all commodities, industrial metals have the highest correlation to equities, according to Deutsche Bank AG.
Tracking Stocks
''Copper is tracking the stock market to a large extent,'' said Ron Goodis, a futures-trading director at Equidex Brokerage Group in Closter, New Jersey.
The price of copper will rebound to $2 a pound in 2009 as mining companies scale back projects, Citigroup Inc. analysts Alan Heap and Alex Tonks said today in a report. Producers including Freeport-McMoRan Copper & Gold Inc. have scaled back plans to boost output as metal prices have dropped.
''Production is being curtailed more rapidly than in previous downturns,'' Citigroup said. ''Supply cuts will stabilize prices.''
On the London Metal Exchange, copper for delivery in three months dropped $50, or 1.3 percent, to $3,755 a metric ton ($1.70 a pound).
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