Copper prices dropped after the government said U.S. retail sales extended a slump to the longest in at least 16 years, signaling the U.S. recession is deepening and metals demand will decline. December retail sales sank for a sixth straight month, dropping 2.7 percent from November, the Commerce Department reported today. The slumping U.S. economy has slashed copper demand, spurring a 12 percent jump in inventories this year. Copper futures lost as much as 5.7 percent today. “On the macro side, there is no evidence that things are getting better, and if anything, they seem to be getting worse,” Edward Meir, an analyst at MF Global Ltd. in Darien, Connecticut, said today in a report. “Producers are still not slashing production fast enough to get ahead of imploding demand.” Copper futures for March delivery dropped 6.7 cents, or 4.3 percent, to $1.48 a pound at 9:34 a.m. on the New York Mercantile Exchange’s Comex division. Before today, the most- active contract plunged 64 percent from a record $4.2605 in May. On the London Metal Exchange, copper for delivery in three months dropped $110, or 3.3 percent, to $3,260 a metric ton ($1.48 a pound).

Source