By Anna Stablum March 30 (Bloomberg) -- Copper fell in London from a 19- month high as a drop in Japanese industrial production fanned concern about the pace of economic recovery in developed nations. Factory output slipped 0.9 percent from a month earlier in February, ending a streak of 11 gains, the Trade Ministry said in Tokyo. Figures due today probably will show that U.S. home prices declined in January for the first time in eight months. “Demand outside China is still relatively weak,” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said by phone. “The risk is increasing that maybe market participants are withdrawing money from commodity markets” as economic data signal a slow recovery in demand, he said. Copper for delivery in three months dropped as much as $63.75, or 0.8 percent, to $7,706.25 a metric ton on the LME. The contract was at $7,749.75 at 10:20 a.m. local time. Prices yesterday touched $7,800, the highest intraday level since Aug. 22, 2008. Copper for May delivery fell 0.5 percent to $3.5185 a pound on the Comex in New York. “There is demand out there, but not to the extent that it can justify these high prices,” Briesemann said. House Prices Builders use more copper products than any other industrial consumer, accounting for more than two-fifths of U.S. demand, according to the Copper Development Association. Price declines were limited as the U.S. Dollar Index, a six-currency gauge of the greenback’s strength, fell for a third day, sliding as much as 0.4 percent. A weaker U.S. currency makes dollar-priced metals cheaper in terms of other monies. “The somewhat weaker dollar supports base-metals prices,” Commerzbank’s Briesemann said. Stockpiles of copper tracked by the LME fell for a 20th day to 514,900 tons, the lowest level since Jan. 8. The streak of declines is the longest since July. Inventories fell to 514,900 tons, the lowest level since Jan. 8. Nickel, Aluminum Nickel for delivery in three months on the LME fell 0.4 percent to $23,909 a ton after reaching $24,498 yesterday, the highest price since June 13, 2008. Stockpiles monitored by the exchange have fallen 4 percent this month to 156,348 tons. Aluminum rose 0.3 percent to $2,288.75 a ton. Scrap supply is undergoing the “most intense tightness” in recent history, increasing prices and spurring consumers to use more newly smelted ingots, researcher Harbor Intelligence said yesterday in a report. Stockpiles held by North American producers are at their lowest in a quarter century and developed nations are producing the least scrap in two decades, according to the researcher. “The bottom line is scrap tightness is not only increasing primary aluminum demand, but has turned into an important driver of primary aluminum prices,” it said. Zinc fell 0.7 percent to $2,315 a ton and lead dropped 0.5 percent to $2,140 a ton. Tin advanced 1.2 percent to $18,248 a ton. --With assistance from Keiko Ujikane and Aki Ito in Tokyo and Shobhana Chandra in Washington. 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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