By Claudia Carpenter Dec. 17 (Bloomberg) -- Copper declined in London, erasing an earlier advance, on concern that the global recession will continue to reduce demand for the metal. Copper for delivery in three months slid $35, or 1.1 percent, to $3,035 a metric ton as of 12:40 p.m. on the London Metal Exchange. It earlier rose as much as 2.3 percent on expectations the Federal Reserve’s interest rate cut yesterday would bolster government efforts to revive growth. “This bounce this morning isn’t underpinned by any significant improvement in fundamentals, so I think it’s going to be very short-lived,” said Gayle Berry, an analyst at Barclays Capital in London. “We’re still a long way away from anything having a significant impact on physical metal buying.” Copper demand will stagnate next year because of the recession, Codelco Chief Executive Officer Jose Pablo Arellano said yesterday. Chilean state-owned Codelco is the world’s biggest producer of the metal, which has tumbled 54 percent this year. The Federal Reserve cut its main interest rate to as low as zero yesterday. The federal funds rate was 4.25 percent at the start of the year. Inventories of copper in warehouses monitored by the LME jumped another 3,275 tons to 321,900 tons, the most since Feb. 13, 2004. Aluminum inventories rose 99,150 tons, or 5.1 percent, to 2.04 million tons, the highest since Oct. 28, 1994. Aluminum prices were unchanged at $1,471 a ton. They fell yesterday to $1,435, the lowest since October 2003. Nickel rose $155 to $9,850 a ton, lead slipped $3 to $986 a ton and tin jumped $75 to $11,000 a ton. Zinc lost $12 to $1,076 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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