Copper fell in London on a stronger dollar and on concern about the strength of the economic rebound in the U.S., the world’s second-biggest consumer of the metal. The U.S. Dollar Index, a six-currency gauge of the greenback’s strength, rose as much as 0.3 percent. Service industries in the country, which make up about 90 percent of the economy, expanded at a slower pace than forecast, figures showed yesterday. Copper retreated even as stockpiles tracked by the London Metal Exchange continued to shrink. “Market participants are looking more at macroeconomic data, which came in worse than expected lately, rather than positive fundamental micro data like declining inventories,” said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt. “There is still the fear of a double dip out there,” or relapse into recession, he said. Copper for delivery in three months fell $80, or 1.2 percent, to $6,525 a metric ton at 9:59 a.m. on the LME. Futures for September delivery dropped 0.6 percent to $2.952 a pound on the Comex in New York. Gains by the dollar make metals priced in the U.S. currency more expensive in terms of other monies. The dollar index has climbed 8.3 percent this year, contributing to LME copper’s 12 percent slide. ‘Long Siege’ The Institute for Supply Management’s index of U.S. non- manufacturing businesses fell to 53.8 in June, data showed yesterday, less than the median forecast of 55 in a Bloomberg News survey. A report due tomorrow may show that consumer borrowing in the country fell by $2.3 billion in May, according to economists surveyed by Bloomberg News. “We are looking at what could be a very long siege here,” Nobel Prize-winning economist Paul Krugman said in an interview yesterday with Carol Massar of Bloomberg Television’s “Street Smart.” “We really are at a stage where we should have a kitchen-sink strategy. We should be throwing everything we can get at this.” Copper also has dropped this year on concern that demand may wane in China, the largest consumer, as the government moves to restrain the nation’s surging economy. Prices slid today as the People’s Bank of China signaled it remains focused on reining in liquidity and stemming inflation. Stockpiles tracked by the LME declined for a 14th day today to 439,350 tons, the lowest level since Nov. 30. Bookings to remove copper from LME warehouses rose 2.5 percent to 35,075 tons, just 350 tons below the level on July 1, which was the highest in almost four months. Aluminum Capacity Aluminum for three-month delivery on the LME slid 1 percent to $1,973.75 a ton. Producers in China “are in the process of idling up to 2.2 million tons per year of capacity due to contraction in domestic aluminum demand, high energy costs given government policy and low aluminum prices,” research group Harbor Intelligence said in a report. Still, prices for the lightweight metal “will continue in the short term in a downward trend,” according to the report, which was dated yesterday. Aluminum dropped for a third month in a row in June on the LME. Lead fell 1.1 percent to $1,760 a ton and nickel slipped 0.2 percent to $18,858 a ton. Zinc fell 1.4 percent to $1,825 a ton and tin dropped 1.2 percent to $17,398 a ton. To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net.

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