(For more commodities columns, click NI CMMKT BN ) Sept. 30 (Bloomberg) -- The biggest rout in copper since the global recession drove analysts to cut their price forecasts by 16 percent in a week as mounting concern about growth eroded expectations for supply shortages. The metal may drop as much as 10 percent to $6,500 a metric ton by Dec. 31, according to the median in a Bloomberg survey of 16 analysts and traders. Their estimate was $7,773 a week ago. Speculators in U.S. futures are making the biggest wager on declining prices in more than two years, U.S. government data show. Barclays Capital cut its forecast for the shortfall in global supplies four times since April and Deutsche Bank AG is anticipating a surplus as early as next year. Commodities tumbled into a bear market this month, dropping 21 percent since April, on concern that slowing growth will curb demand for raw materials. Prices had more than doubled since the beginning of 2009 as surging consumption led by emerging markets created shortages in everything from corn to copper to crude. As many as 5,000 merchants will gather in the British capital from Oct. 3 for London Metal Exchange week, an annual event during which supply contracts are discussed. "If you don't have demand then you don't need to talk about shortages," said Robin Bhar, an analyst at Credit Agricole SA in London who has followed the metals market for about 25 years. "This is not a normal market. There is a lot of fear out there. At the moment people are panicking. When you panic, you don't think rationally." Quarter Century Copper, which reached a record $10,190 on the London Metal Exchange in February, sank to $6,800 on Sept. 26, a 14-month low. The contract traded at $7,259 today, taking this year's decline to 24 percent. The metal is on track for its second- worst year in almost a quarter century, exceeded only by a 54 percent retreat in 2008. The Standard & Poor's GSCI gauge of 24 commodities fell 4 percent this year, led by cotton, copper and nickel. The MSCI All-Country Index of equities dropped 14 percent. Treasuries maturing in 10 years or more returned 25 percent, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. Copper consumption fell 0.9 percent in 2008 as the global economy contended with recession, driving supply into a surplus from a shortage, Morgan Stanley estimates. Global stockpiles in warehouses monitored by exchanges in London, New York and Shanghai expanded 15 percent to 650,851 tons since the start of January, a sign that demand may be weakening. Inventories are about 50 percent higher than the average over the past five years, data compiled by Bloomberg show. Consuming Nation This year's gain in stockpiles still falls short of the expansions seen during the global recession, when they rose 63 percent in 2008 and 78 percent in 2009. Monthly imports by China, the biggest consuming nation, rose 58 percent since reaching a 2 1/2-year low in May, customs data show. While China's economic growth will slow to 9.3 percent this year from 10.4 percent in 2010, it will still be almost six times faster than the U.S., according to the median of as many as 66 economists' estimates compiled by Bloomberg. China accounts for about 38 percent of global copper demand, compared with 8 percent for the U.S. and 15 percent for Western Europe, Morgan Stanley estimates. The International Monetary Fund cut its global growth forecasts to 4 percent for this year and next on Sept. 20, compared with earlier estimates of 4.3 percent for 2011 and 4.5 percent in 2012. That would still exceed the 5.2 percent contraction in gross domestic product that the World Bank estimates took place in 2009.

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