LONDON, Oct. 29 -- Copper prices dropped for the third straight day, the longest slump in six weeks, after a downbeat report on U.S. housing signaled demand for the metal may slacken.
Sales of new homes unexpectedly fell in September, a sign the recovery may lose momentum after a government tax credit expires. Home sales decreased 3.6 percent to a 402,000 annual pace, the Commerce Department said today. Builders are the biggest users of the metal, putting about 400 pounds (181 kilograms) of copper pipes and wires into the average home.
"We could be at a turning point for copper, where we see prices start to head much lower," said Matthew Zeman, a trader at LaSalle Futures Group in Chicago.
Copper futures for December delivery slid 6.85 cents, or 2.3 percent, to $2.9305 a pound on the Comex division of the New York Mercantile Exchange. The price has declined 3.4 percent in three days, the longest slide since Sept. 14.
Prices have more than doubled this year as imports surged in China, the world's biggest metals user, and the dollar slumped against major currencies. The gains in copper may be "unsustainable" as the global-economic recovery stalls, Zeman said.
Inventories of copper in warehouses monitored by the London Metal Exchange rose 0.3 percent to 371,725 metric tons, the highest since May 13. The price on the LME rose to a record $8,940 a ton ($4.05 a pound) in July 2008.
"Markets are still running ahead of fundamentals," said Alex Heath, the head of industrial metals trading at RBC Capital Markets in London.
Copper for delivery in three months declined $150, or 2.3 percent, to $6,430 on the LME.
Aluminum, nickel, lead, tin and zinc also fell in London.