Copper declined for the first time in seven days in London on concerns that China’s plan to tame inflation even as the economy slows may hurt demand for metals. Zinc and lead also fell. Chinese Premier Wen Jiabao said that a faltering global recovery and turbulence in financial markets have yet to convince his government to switch from a focus on taming inflation. Inflation reached a three-year high of 6.5 percent in July. A manufacturing index in China, the biggest copper consumer, stayed near the borderline between expansion and contraction in August. “A macro-backdrop of tightening and fighting inflation is surely bearish for not only the equities but industrial commodities such as base metals,” Ye Yanwu, head of research at Everbright Futures Co. in Shanghai, said by phone today. Copper for three-month delivery retreated $131.75, or 1.4 percent, to $9,143.25 a metric ton by 9:32 a.m. on the London Metal Exchange The metal fell 5.6 percent in August, the first drop in three months. Copper for December delivery slid 1.2 percent to $4.1525 a pound on the Comex in New York. The Purchasing Managers’ Index rose to 50.9 from a 29-month low of 50.7 in July, with new export orders falling to 48.3 from 50.4 of the previous month, the China Federation of Logistics and Purchasing said in a statement today. A reading above 50 indicates an expansion. Chinese export orders fell for the first time in two years in August. Home Purchases Five interest rate increases since October, limits on home purchases and lending curbs that included raising banks’ reserve requirements to a record are slowing domestic demand in the world’s second-largest economy. “It doesn’t surprise me that the Chinese are still coming out with these anti-inflationary comments,” Nic Brown, head of commodities research at Natixis Commodity Markets Ltd. in London, said by phone. “The developing countries for the last six to nine months have been wrestling with the problems of the high inflation.” Aluminum for three-month delivery on the LME fell 0.8 percent to $2,449.75 a ton. Buyers in Japan, Asia’s largest importer, agreed to pay a premium of $118 a ton for the fourth quarter this year over the cash contract on the LME, 2 percent lower from $120 for the third quarter. This was the first drop in three quarters amid abundant supplies as smelters in the Middle East boosted shipments to Asian buyers. Lead dropped 2.4 percent to $2,517.25 a ton and tin declined 1.6 percent to $24,000 a ton. Nickel fell 1.4 percent to $21,900 a ton and zinc slid 2.3 percent to $2,240 a ton. To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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