By Anna Stablum June 18 (Bloomberg) -- Copper fell in London and headed for a weekly decline after reports stoked concern that the economic rebound may be weaker than expected in the U.S., the world’s second-largest consumer of the metal. Manufacturing in the Philadelphia Federal Reserve Bank’s region expanded in June at the slowest pace since August, and initial jobless claims rose in the week ended June 12, data showed yesterday. U.S. housing starts fell the most since March 2009 and building permits, a sign of future construction, slid to a one-year low, reports showed on June 16. “The U.S. data was not great,” said Jesper Dannesboe, a strategist at Societe Generale SA in London. Still, “we expect the U.S. recovery to continue, helped by super-lax monetary policy and pent-up demand,” he said. Copper for delivery in three months dropped $81, or 1.3 percent, to $6,365 a metric ton at 10:26 a.m. on the London Metal Exchange. The contract retreated to the lowest intraday price since June 10 and is down 1.8 percent this week. Futures for September delivery declined 1.2 percent to $2.888 a pound on the Comex in New York. LME copper has slid 14 percent this year on concern about European nations’ ability to reduce budget deficits and steps taken by China, the biggest copper user, to cool its real-estate market. Governments in countries from Greece to Portugal are slashing wages for state employees and increasing taxes in an effort to rein in borrowing. ‘Overdone’ China Concern “European governments are about to tighten fiscal policies, and the market is worried about the impact on the global economy,” Dannesboe said. Concern about the possibility of “a sharp economic slowdown” in China stemming from government policy measures is “vastly overdone,” he said. China should make more use of the exchange rate and interest rates to help manage its economy and reduce risks from surging housing prices and overinvestment, the World Bank said today in a quarterly report on the nation’s economy. Still, UniCredit SpA expects “some weakening” in China linked to the government measures, analyst Jochen Hitzfeld in Munich said by phone. “Copper prices will stay around $6,400” a ton in the year’s second half, he said. Copper has slid 4.7 percent since June 15, erasing a 3.1 percent gain in this week’s first two days, as the U.S. housing- start and building-permit figures weighed on prices. Construction accounts for a quarter of copper demand, according to the Copper Development Association. Nickel, Tin Nickel for three-month delivery on the LME fell 1.8 percent to $19,439 a ton and aluminum slipped 0.1 percent to $1,964 a ton. Zinc dropped 1.4 percent to $1,740 a ton, lead shed 1.9 percent to $1,731 a ton and tin fell 0.8 percent to $17,600 a ton. Stockpiles of copper tracked by the LME fell 0.6 percent to 457,425 tons, the lowest since Dec. 8. Inventories monitored by the Shanghai Futures Exchange shrank for a seventh week to the lowest level in more than three months. They fell 2.4 percent to 135,944 tons, the exchange said in a statement today. Bookings to remove metal from LME warehouses declined 3.5 percent to 27,400 tons. LME-monitored aluminum inventories fell for a third day to 4.47 million tons. One party held between 40 percent and 49 percent of available inventories as of June 15, according to the latest data from the bourse. That’s down from between 50 percent and 79 percent in the previous session. --With assistance from Glenys Sim in Singapore. Editors: Dan Weeks, John Deane. To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net. To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

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