Copper fell for a second day in London after China ordered companies in 19 industries to cut excess production capacity, underscoring concern demand is set to slow in the biggest consumer of the metal. Copper smelting, steel and electrolytic aluminum are among areas to be affected, the government said yesterday. Surplus capacity must be idled by September and eliminated by year-end, it said. Manufacturing in the nation shrank in July for the first time in 10 months, economists said in a Bloomberg survey before an official gauge due Aug. 1. “The market is already very bearish and is therefore likely to interpret this as further evidence of a slowdown,� Nic Brown, head of commodities research at Natixis SA in London, said by e-mail today. Copper for delivery in three months lost 0.8 percent to $6,962 a metric ton by 9:35 a.m. on the London Metal Exchange, reducing this week’s advance to 0.7 percent. Copper for delivery in September fell 0.8 percent to $3.1595 a pound on the Comex in New York. “We are still cautious� on China, Mark Pervan, an analyst at Australia & New Zealand Banking Group Ltd., said in a report. China aims to move toward slower, more-sustainable economic growth. The plan will entail shutting down 654,400 tons of copper capacity and 260,000 tons for aluminum as part of the initial goal, according to Bloomberg calculations based on a government statement yesterday. The country produced 5.82 million tons of refined copper and 20.8 million tons of aluminum last year, according to Barclays Plc. The aluminum market “desperately� needs Chinese shutdowns and further capacity closings, according to Natixis. “This is a process that the Chinese authorities go through every year,� Brown said. “Old and outdated technology is shut down in favor of newer capacity that has been installed.� LME copper inventories fell for an eighth session to 621,175 tons, daily exchange figures showed. Inventories tracked by the Shanghai Futures Exchange slid to 161,564 tons this week, data showed today. Orders to remove copper from LME warehouses rose 1 percent to 319,750 tons. Zinc, lead, aluminum and nickel slid in London. Tin rose. To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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