By Anna Stablum March 24 (Bloomberg) -- Copper fell for a second day in London as the dollar strengthened, reducing the appeal of industrial metals as an alternative investment. The euro slid to a 10-month low against the dollar after government officials said the European Union may need International Monetary Fund help to bail out Greece and Fitch Ratings cut Portugal’s credit rating. A stronger U.S. currency makes dollar-denominated commodities more expensive in terms of other monies. “The metals are seeing extensive selling as risk is cut on the back of the Greece-IMF news and a ratings downgrade for Portugal,” said David Thurtell, an analyst at Citigroup Inc. in London. Copper for delivery in three months fell $80, or 1.1 percent, to $7,360 a ton at 10:46 a.m. on the London Metal Exchange. Copper for May delivery slid 1.2 percent to $3.337 a pound on the Comex in New York. All of the six main metals traded on the LME declined. Fitch lowered Portugal’s long-term foreign and local currency issuer default ratings by one step to AA-. Concern about the ability of European nations including Portugal and Greece to reduce budget deficits has pulled the euro down this year. Business Confidence Copper prices are little changed this year after more than doubling in 2009, partly because of a weaker dollar. The euro has dropped 6.8 percent against the U.S. currency in 2010, wiping out last year’s 2.5 percent advance. Business confidence in Germany, the world’s third-biggest copper consumer after China and the U.S., rose more than expected in March, a report showed. The Munich-based Ifo institute’s business climate index increased to 98.1 from 95.2 in February. Economists surveyed by Bloomberg predicted a gain to 95.8. “The Ifo numbers were good, but the market doesn’t seem to care,” said Citigroup’s Thurtell. “It is too concerned about Greece and the rising U.S. dollar.” Separate reports showed that Europe’s services and manufacturing industries grew at the fastest pace since 2007 and European industrial orders unexpectedly slid in January, led by lower demand for capital goods such as machinery. U.S. Housing A composite index based on a survey of euro-area purchasing managers in services and manufacturing companies rose to 55.5 in March, Markit Economics said today. That’s the fastest pace since August 2007. Orders to industrial companies in the 16- nation euro area fell 2 percent from December, the European Union’s statistics office said. Figures due today may show that orders in the U.S. for long-lasting goods climbed in February for a third month and sales of new homes rose from a record low. Construction is the second-biggest consumer of copper, using 25 percent of all production, according to the Copper Development Association. Stockpiles of copper in LME-monitored warehouses fell today for a 16th day to 520,450 tons, the lowest level since Jan. 12, posting the longest falling streak since July. Production at Teck Copper markets will continue to tighten this year, Don Lindsay, chief executive officer of Teck Resources Ltd., said yesterday at a conference in Singapore. The Vancouver-based company, Canada’s largest industrial-metals producer, will expand copper output by 40 percent in the next two years, he said. Aluminum for delivery in three months on the LME fell 1.2 percent to $2,231 a ton. The lightweight metal touched $2,303, the highest intraday level since Jan. 20, on March 17. “Prices may consolidate between $2,200 and 2,300 per ton before the upward trend resumes,” Jorge Vazquez, a vice president at Laredo, Texas-based researcher Harbor Intelligence’s aluminum unit, said in a report yesterday. The metal remains on course to reach $2,400 to $2,650 “before the end of May,” he said. Lead shed 2.6 percent to 2,050 a ton after falling as low as $2,038, the lowest intraday price since Feb. 10. Zinc fell 1.2 percent to $2,213 a ton, nickel dropped 1.3 percent to $22,199 a ton and tin declined 0.8 percent to $17,455 a ton. --With assistance from Glenys Sim and Liza Lin in Singapore, Keiko Ujikane in Tokyo, Gabi Thesing and Simone Meier in Frankfurt, Colleen McElroy in New York and Rebecca Keenan in Melbourne. Editors: Dan Weeks, Stuart Wallace. To contact the reporter on the story: Anna Stablum in London at astablum@bloomberg.net. To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net.

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