Copper fell to the lowest in three years amid sales of industrial metals, oil and gold as the threat of a recession in U.S. and European economies curbs demand.
Copper added to last week's 22 percent drop, the biggest weekly decline since at least 1986. The U.S. economy probably shrank at a 0.5 percent annual rate last quarter, the second drop in a year, the median estimate in a Bloomberg survey indicated.
''As long as the economic picture isn't clear, investors are going to sell into any rally,'' said Lars Steffensen, managing director of Ebullio Capital Management LLP, which runs a $20 million commodity hedge fund. Only ''a meteorite hitting earth'' could make things worse, he said from Southend-on-Sea, England.
Copper for three-month delivery fell $130, or 3.5 percent, to $3,640 a metric ton as of 10:51 a.m. on the London Metal Exchange. The contract earlier lost as much as 4.8 percent to $3,590 a ton, the lowest intraday price since Sept. 19, 2005.
The metal has fallen 45 percent this year as demand growth shrinks in China, the world's biggest user. Declines today pushed mining stocks lower including BHP Billiton Ltd., which owns the world's largest copper mine, Escondida, in Chile.
Consumption in China may slow to 5 percent this year, said Duan Shuaofu, copper division chief at the China Nonferrous Metal Industry Association, half the previous forecast.
Merrill Lynch & Co. today cut its 2009 forecast for copper 41 percent, aluminum 19 percent and nickel by 36 percent.
Copper stockpiles monitored by the LME rose 0.7 percent to 213,375 tons, the exchange reported today, the highest since Feb. 16 and taking this year's gains to 8.1 percent.
Tin, the only industrial metal that gained today, rose $250, or 2.1 percent, to $12,000 a ton as inventories declined 11 percent to 4,080 tons, the lowest since Aug. 4, 2005.
Aluminum dropped $26, or 1.3 percent, to $1,945 a ton and nickel fell $500, or 5 percent, to $9,500. Lead lost $76, or 6 percent, to $1,195 and zinc was $60 lower at $1,105 a ton.
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