Copper declined in London, set for a second quarterly drop, on concern higher consumer prices may slow growth from China to Europe, reducing demand for industrial metals. Zinc, lead and nickel also fell. Three-month copper on the London Metal Exchange slid for the first day in three, shedding as much as 0.7 percent to $9,255 a metric ton. The metal last traded at $9,301 by 10:42 a.m. in Singapore, down 1.4 percent in the past three months. “Inflation is a problem that isn’t going to go away in the near term and central banks around the world will have to start tightening, which will drain the liquidity that helped push prices up in recent years,” said Liang Haisan, an analyst at Citic Newedge Futures Co. Copper on the Comex in New York fell as much as 0.4 percent to $4.206 a pound, while metal for September delivery on the Shanghai Futures Exchange gained as much as 1.9 percent to 69,380 yuan ($10,734) a ton. Central banks around the world are battling inflation as well as slowing growth after accelerating food costs pushed consumer prices higher. Inflation in China, the world’s largest metals user, may be 5.3 percent in the first half and 4.9 percent for the year, the China Securities Journal reported today, citing estimates by the State Information Center. The government’s full-year target is 4 percent. Consumer prices in South Korea are expected to rise 4 percent this year, exceeding an initial 3 percent target, the Finance Ministry said today. Inflation in the European Union, China’s largest export market, has breached the central bank’s 2 percent limit since December. European Central Bank President Jean-Claude Trichet said June 28 policy makers are in “strong vigilance mode.” Monthly Advance “We’re seeing some profit-taking after the nice rally yesterday, which is coupled with month-end liquidation today,” said Li Yongmin, senior analyst at Green Futures Brokerage Co. Copper in London climbed to $9,320.20 a ton yesterday, the highest level in almost two months, after Greece passed austerity measures needed to secure financial aid, easing concern of a default that may destabilize the banking system. The metal has gained 1 percent this month and is set to stem a three-month losing streak on optimism China’s demand will improve. Inventories in LME warehouses in South Korea, Singapore and Malaysia, the locations nearest to China, dropped for a ninth day yesterday to 182,025 tons. Stockpiles have fallen 4.3 percent in the past two weeks. Zinc in London declined 1 percent to $2,294 a ton, lead dropped 0.6 percent to $2,618 a ton and nickel was little changed at $23,100 a ton. Aluminum climbed 0.2 percent to $2,538 a ton, while tin hadn’t traded. To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net To contact the editor responsible for this story: James Poole at jpool4@bloomberg.net

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