Copper may decline in New York and London as a strengthening dollar reduces the appeal of industrial metals as an alternative investment. The U.S. Dollar Index, a six-currency measure of the greenback’s strength, rose as much as 0.6 percent. A stronger dollar makes metals priced in the currency more expensive in terms of other monies. Copper climbed on Oct. 1 to the highest intraday level since July 30, 2008, on the Comex in New York. “The dollar has stabilized,” Steve Hardcastle, an analyst at Sucden Financial Ltd. in London, said by phone. “We have overreached ourselves, so we may consolidate for a day or so, and then it will start to pick up again later in the week.” December-delivery copper slid 0.9 cent, or 0.2 percent, to $3.6815 a pound at 8:16 a.m. on the Comex. The 14-day relative strength index, a gauge of whether a commodity is overbought or oversold, last week advanced above 70, a level some analysts who study technical charts view as a signal that prices may be set to drop. Copper for delivery in three months slipped 0.1 percent to $8,094 a metric ton on the London Metal Exchange. The euro dropped from a six-month high against the dollar as concern about European nations’ sovereign debts reduced demand for the region’s assets. The single currency declined after the Financial Times reported that Ireland’s budget deficit this year will be higher than earlier forecast. Inventories Expand Concern about government debts in Europe “will inhibit things,” Hardcastle said. “It is a risk.” Copper stockpiles tracked by the LME rose for the first time in six days to 374,450 tons, daily exchange figures showed. Orders to draw copper from LME inventories, or canceled warrants, slid 8.7 percent to 18,350 tons. That was the ninth drop in a row, the longest declining streak since May 11. In China, the world’s top copper consumer, the Shanghai Futures Exchange is closed until Oct. 7 for the National Day holiday. “We will gradually lift leading into Friday,” Sucden’s Hardcastle said. “I do think there is still some physical stock rebuilding to be done in China.” Tin for three-month delivery on the LME was unchanged at $24,900 a ton. Prices reached $25,200 on Oct. 1, the highest level since May 16, 2008, and only $300 below the metal’s all- time high. Tin is this year’s best LME performer, up 47 percent, after production disruptions in Indonesia and Democratic Republic of Congo bolstered prices. Nickel, Lead Nickel shed 0.2 percent to $23,790 a ton after reaching $24,100, the highest intraday price since May 5. The metal, mostly used to make stainless steel, has gained 28 percent this year on the LME, second only to tin. The outlook for prices over the next three to six months is “positive, given the slow ramp-up of new nickel projects coming next year and the strong recovery of stainless-steel production worldwide,” Macquarie Bank said in a report today. About two- thirds of all nickel is used in stainless steel. “However, there are growing concerns over increases in the Western-world nickel supply in 2011.” Aluminum fell 0.1 percent to $2,356 a ton, lead dropped 0.5 percent to $2,283 a ton and zinc added 0.1 percent to $2,232 a ton. 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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