Copper production in China, the world’s largest consumer, dropped in October as high prices and ample supply of refined material damped buying interest. Output of the refined metal declined 1.2 percent to 400,000 metric tons from 405,000 tons in September, according to the National Bureau of Statistics. It was 0.2 percent lower than a year earlier, the data showed. Copper smelters in China ramped up production in September amid sufficient supplies of concentrate and scrap. Copper in London jumped to a record today after China’s inflation reached a two-year high, prompting investors to buy commodities as a hedge against accelerating consumer prices. “The high prices have eroded short-term demand in China and we see this being reflected in the output and import numbers,” Zhang Xi, an analyst at Luzheng Futures Co., said from Shandong. Metal for three-month delivery on the London Metal Exchange gained as much as 2.1 percent to $8,945 a metric ton, surpassing the previous peak of $8,940, set in July 2008. The contract, which more than doubled last year, has advanced 21 percent in 2010 on speculation that global supply will lag behind demand, and on prospects for a weaker dollar. The country’s copper-concentrate production slipped to 108,000 tons in October from 119,000 tons in September, bureau data showed. Smelters buy the concentrate from mining companies or use scrap copper, to produce refined material. --Helen Sun. Editors: Richard Dobson, Jarrett Banks. To contact the Bloomberg News staffs on this story: Helen Sun in Shanghai at hsun30@bloomberg.net; To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

Source