By Millie Munshi Oct. 21 (Bloomberg) -- Copper tumbled below $2 a pound for the first time since December 2005 on speculation that the world economy is headed for a recession that will reduce demand for metals. China, the biggest contributor to global growth, expanded at the slowest pace in five years in the third quarter, a report showed yesterday. U.S. lawmakers and officials moved toward forging a second fiscal-stimulus package to stem the economic decline. Before today, copper dropped 30 percent this year as consumption slumped. ``It's very significant to see copper come under $2,'' said Ron Goodis, a futures-trading director at Equidex Brokerage Group Inc. in Closter, New Jersey. ``People are wondering, `How did it fall so far so fast?' It's easy. With this economy, it doesn't matter what the price is. People don't want copper.'' Copper futures for December delivery fell 8.4 cents, or 4 percent, to $2.0325 a pound at 11:04 a.m. on the Comex division of the New York Mercantile Exchange. Earlier, the price touched $1.992, the lowest for a most-active contract since Dec. 21, 2005. The metal rose to a record $4.2605 on May 5. ``Economic conditions have weakened dramatically in recent weeks, and there is significant uncertainty about the near-term price outlook,'' Freeport-McMoRan Copper & Gold Inc., the world's biggest publicly traded copper miner, said today in a statement. Freeport said third-quarter profit dropped 33 percent. The shares fell as much as 9.6 percent and are down 67 percent this year. Worst Year Since 1989 Copper is heading for its biggest annual slide since 1989, the year the data begins, when the price fell 31 percent. The metal last had an annual decline in 2001, when the price fell 23 percent as a U.S. recession curbed manufacturing. Economists including Alan Greenspan, the former Federal Reserve chairman, monitor the metal as an economic barometer. Copper, used in homes, cars and appliances, had more than doubled in the past five years as demand surged in China, the worlds' fastest-growing major economy. Chinese gross-domestic product rose 9 percent in the third quarter from a year earlier, the weakest quarter since 2003, the statistics bureau in Beijing said yesterday. The country is the world's biggest metals user. Copper's slump ``is attributable to the fact that the global slowdown is now spreading to China,'' Edward Meir, an analyst at MF Global Ltd. in Darien, Connecticut, said in a report today. `Striking, Unusual' The metal's ``sharp'' drop has taken traders and producers by surprise, Goodis of Equidex said. Unexpected declines for energy and metals have hammered some investors. Ospraie Management LLC, once the world's largest hedge fund dedicated to natural resources, said in September the firm would close its largest pool following a 39 percent slump this year. Freeport Chief Executive Officer Richard Adkerson said today that copper's slump has been ``striking'' and ``unusual.'' The company said it would delay some projects planned to increase production until market conditions improve. On the London Metal Exchange, copper for delivery in three months dropped $230, or 4.9 percent, to $4,490 a metric ton ($2.04 a pound). To contact the reporter on this story: Millie Munshi in New York at mmunshi@bloomberg.net.

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