By Glenys Sim Oct. 15 (Bloomberg) -- Copper futures slumped by the exchange-imposed daily limit in Shanghai as Asian stocks fell on skepticism the U.S. Treasury's plan to inject $250 billion into financial institutions would prevent a recession. Copper in London resumed its decline after capping the biggest two-day gain in 29 months yesterday. The metal also traded lower on concern supply will outpace demand as a global economic slump cuts consumption. ``We saw a bit of a relief rally yesterday, but it didn't undermine the fact that the global economy is deteriorating and demand going forward will be slow,'' Tao Jinfeng, an analyst at Jiangsu Donghua Futures Co., said today from Tianjin. Copper for December delivery on the Shanghai Futures Exchange fell by 1,740 yuan, or 4 percent, from the previous settlement price, to 41,720 yuan ($6,107) a metric ton at 9:02 a.m. local time. The most-active contract rose 6 percent yesterday after declining by the limit for the previous five sessions. December- delivery zinc in Shanghai also fell the 4 percent daily limit to 11,485 yuan a ton. ``The rescue plans by governments will probably bring some stability to financial markets but they are unlikely to stave off a global recession,'' said Tao. Copper for delivery in three months on the London Metal Exchange fell as low as $5,125 a ton, and traded 3.1 percent down at $5,135 at 9:32 a.m. Singapore time. The metal climbed 11 percent in the past two days, the largest two-day gain since May 2006. `Small Surplus' Codelco, the world's biggest copper producer, expects a ``small surplus'' of the metal next year as demand weakens, particularly in the U.S. and Europe, Jose Pablo Arellano, chief executive officer, said yesterday. The U.S. is the second- largest user of copper after China. U.S. and Asian stocks fell on a worsening outlook for the global economy and after Federal Reserve Bank of St. Louis President James Bullard said the U.S. economy appears to be slowing. The MSCI Asia Pacific Index lost 1.3 percent to 95.38 as of 9:34 a.m. in Singapore. Among other LME-traded metals, aluminum was down 0.7 percent at $2,266 a ton, lead slipped 3.1 percent to $1,590, nickel lost 1.6 percent to $12,600, and tin fell 3.3 percent to $14,500. Zinc was unchanged at $1,410 as of 9:35 a.m. in Singapore. To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net

Source