Copper drops on Chinese demand outlook

Copper fell for the first time in four days, paring its fifth quarterly gain, as some investors deemed the recent rally overdone amid uncertainties about demand in China. Copper for three-month delivery on the London Metal Exchange dropped as much as 0.8 percent to $7,711 a metric tonne, before trading at $7,740 by 10:16 am in Singapore. The contract rose as high as $7,800 a tonne yesterday, a level not seen since August 2008, before Lehman Brothers Holdings Inc filed for bankruptcy. Copper for July delivery on the Shanghai Futures Exchange was little changed at 62,150 yuan a tonne on concern policy makers will tighten money supply to keep inflation in check. Still, the metal has gained 4.9 per cent in London this year as global inventories dropped every day since March 3. Stockpiles tallied by the Shanghai Futures Exchange also dropped 8.1 perc ent last week, the largest decrease since December. Aluminum fell 0.3 per cent to $2,276 a tonne, zinc declined 0.9 per cent to $2,310 a ton and nickel lost 1.2 per cent to $23,699 a ton. Lead was little changed at $2,150 a tonne and tin fell 0.4 per cent to $17,950 a tonne at 10:42 am in Singapore.