By Claudia Carpenter Oct. 31 (Bloomberg) -- Copper and aluminum headed for their biggest monthly drops in two decades as a slump in equities and a stronger dollar heightened speculation that a global recession will curb demand for industrial metals used in cars and homes. Copper has shed 38 percent this month and aluminum is down 16 percent. The MSCI World Index of equities has dropped 20 percent while the dollar has risen 11 percent against the euro, making metals more expensive for buyers in Europe. ``Any moves today will be closely linked to the dollar and equity performances,'' said Michael Khosrowpour, an analyst at Triland Metals Ltd. in London. Copper for delivery in three months dropped $240, or 5.7 percent, to $3,960 a metric ton by 9:21 a.m. on the London Metal Exchange. Aluminum dropped $35 to $2,025 a ton. The LME index of six industrial metals has dropped 27 percent this month through yesterday, heading for the biggest monthly drop since at least May 2000. U.S. auto sales probably fell for the 12th straight month in October, extending the longest slide in 17 years. Auto companies report sales Nov. 3. China, the world's largest copper buyer, may postpone plans to buy copper from overseas on speculation a global recession may push prices even lower, according to two traders, who requested anonymity. The State Reserve Bureau won't buy copper before next year, said the traders. Stockpiles of copper in warehouses monitored by the LME gained 6,775 tons, or 3 percent, to 230,650 tons, the most since March 2004. Inventories in warehouses monitored by the Shanghai Futures Exchange declined 20 percent in the week ended yesterday. Among other metals traded on the LME, nickel dropped $505, or 4.2 percent, to $11,400 a ton. Lead for three-month delivery fell $60 to $1,460 a ton. Zinc fell $33 to $1,127 and tin dropped $650 to $14,000 a ton. To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net or ccarpenter2@bloomberg.net

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