Copper fell to the lowest price in almost one year in London after a China factory index signaling contraction added to speculation of slowing metals demand. A preliminary index of China purchasing managers was 49.4 this month, according to HSBC Holdings Plc and Markit Economics. A reading below 50 indicates contraction. Copper has dropped 18 percent this year as Europe’s debt crisis and the possibility of another U.S. recession hampered metals demand. In the last U.S. recession, copper fell 54 percent in 2008. “The meltdown of 2008 is in the cards if the defaults start in Euroland,” said David Threlkeld, president of Resolved Inc., a copper trading company in Scottsdale, Arizona. Copper for delivery in three months declined $435, or 5.2 percent, to $7,865 a metric ton at 10:11 a.m. on the London Metal Exchange, after earlier today falling to $7,860, the lowest since Sept. 28. Copper has dropped 22 percent from the record $10,190 on Feb. 15. Euro-area services and manufacturing output also contracted in September, for the first time in more than two years, a report from London-based Markit Economics today showed. The composite index declined to 49.2 this month from 50.7 in August. Europe accounts for 19 percent of global copper demand, compared with China’s 37 percent and 11 percent for North America, according to Barclays Capital. Demand Forecast Global copper demand is expected to grow 3.9 percent this year, faster than global production and resulting in a shortage of 639,000 tons, Barclays forecast on Aug. 24. “Copper’s almost like a symbol of the bigger commodity markets,” Kevin Norrish, an analyst at Barclays in London, said in an interview today. “There’s evidence of increasing fundamental tightness that’s not feeding into prices because of macroeconomic concerns.” Political squabbling in Europe over ways to prevent the debt crisis from spreading and delays in implementing agreed- upon measures are raising concerns about the risk of defaults by governments such as Greece, the International Monetary Fund said yesterday. The Washington-based IMF cut its global growth forecast and predicted “severe” repercussions if policy makers fail to stem the debt turmoil threatening to engulf Italy and Spain. The index of U.S. leading indicators in August probably rose 0.1 percent, slower than the 0.5 percent the month before, according to the median estimate of 56 forecasts in a Bloomberg News survey. The Conference Board’s report is due at 10 a.m. in New York. Tin led declines on the LME, falling 7.6 percent to $20,000 a ton. Aluminum fell 1.6 percent to $2,282 a ton, nickel dropped 3.9 percent to $19,614 a ton and lead declined 2.8 percent to $2,160 a ton. Zinc was down 3 percent at $2,014 a ton. To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@abloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter@bloomberg.net.

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