By Chanyaporn Chanjaroen Oct. 10 (Bloomberg) -- Copper headed for its biggest weekly rout in 22 years in London on concern that a global recession will sap demand for metals, used in everything from construction to cars. Aluminum fell to the lowest in almost three years. Copper has shed 18 percent this week, the steepest drop since at least April 1986. The MSCI World Index of equities has lost the same amount. French industrial production declined in August, adding to evidence the second-largest economy in the euro zone probably slipped into recession in the last quarter. ``The deteriorating macro environment, the possibility of modest surplus in 2009 and 2010 and the fact that the copper price is much further above costs of production than other metals taken together make an unattractive mix,'' Nick Moore and other analysts at RBS Global Banking & Markets in London said in a report today. Copper for delivery in three months fell as much as $515, or 9.7 percent, to $4,800 a metric ton, the biggest one-day decline since October 2004. The contract traded down 7.8 percent at $4,900 a ton as of 1 p.m. on the London Metal Exchange. The metal has tumbled 26 percent this year, compared with a 16 percent loss in the S&P GSCI index of 24 raw materials, and a 38 percent drop in the Standard and Poor's 500 index. Production will outpace consumption by 277,000 tons next year, from 109,000 tons this year, the Lisbon-based International Copper Study Group said Oct. 8. ``Not only may global usage be reduced by a global economic downturn, but also credit constraints and altered feasibility analyses could reduce or delay expected new production,'' the government-backed group said. Inventories Expand Copper stockpiles jumped 59 percent to 25,681 tons this week, the Shanghai Futures Exchange said today. Including metal inventories monitored by the LME and the Comex division of the New York Mercantile Exchange, they total 234,206 tons, or 4.6 days of global consumption, according to Bloomberg calculations. Last year's average was 4.9 days. The implied volatility of copper for immediate delivery was at 57 percent on Oct. 8, the highest since June 2006. The reading was 56 percent yesterday. Aluminum fell as much as $115, or 5 percent, to $2,190 a ton, the lowest since 2005. Lower prices, combined with weaker demand is forcing Aluminum Corp. of China Ltd., the country's largest producer of the metal, to consider suspending some higher-cost operations. ``We are considering some measures to reduce operating risks that may hurt our profitability,'' Zhang Qing, investor relations manager at the Beijing-based company, said today by phone. Nickel slipped $1,175, or 8.8 percent, to $12,225 a ton, the lowest since November 2005 and tin dropped $1,200, or 8.2 percent, to $13,550 a ton. Zinc declined $117, or 7.8 percent, to $1,380 a ton and lead fell $182, or 11 percent, at $1,482 a ton, the lowest since November 2006. To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net

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