Copper, which reached a record $10,190 on the London Metal Exchange in February, sank to $6,800 on Sept. 26, a 14-month low. The contract traded at $7,067.50 today, taking this year’s decline to 26 percent. The metal is on track for its second- worst year in almost a quarter century, exceeded only by a 54 percent retreat in 2008.

Declines in August and September pared a five-month, fourfold surge that brought the average price for eight of the most widely used rare-earth oxides to a record 396,850 yuan ($62,068) a metric ton in July, data from consultant Shanghai Steelhome Information show. The average price declined 13 percent from its July peak as of Sept. 27.

Tire demand will shrink rubber stockpiles to 12 percent of use in 2012, a four-year low, estimates Citigroup Inc. Prices may jump 18 percent to $5 a kilogram (2.2 pounds) by Dec. 31, a Bloomberg survey of 15 analysts and traders shows.

On the Comex in New York, copper futures for December delivery fell as much as 7.8 percent to $3.215 a pound. Prices have dropped as much as 31 percent since touching a record $4.6575 on Feb. 15. On the London Metal Exchange, nickel plunged as much as 11 percent to $16,800 a metric ton.

Prices for the vital industrial minerals known as rare earths appear to have moderated in recent weeks following two years of relentless gains, as the supply outlook brightens and dominant producer China faces possible legal challenges to export restrictions.

Global prices may fall 29 percent to an average $123 a metric ton in 2015 from a record $173 this year, according to the median estimates of 10 analysts surveyed by Bloomberg News. The decline contrasts with estimates for little change in copper and a 10 percent increase for aluminum in the same period, London Metal Exchange futures prices show.

Commodities erased this year’s gains after the U.S. Federal Reserve said the world’s biggest economy faces “significant downside risks,” boosting speculation raw-material demand will falter.

As of August, the number of steel-futures contracts traded on the CME Group Inc. exchange was up 25% from a year ago to average 2,000 trades a month, while the London Metal Exchange, which offers a more widely used benchmark, sees about 20,000 contracts traded a month, up 55% from a year ago.

Copper prices are showing strain amid worries that Europes sovereign-debt problems will substantially erode demand and create a surplus of the industrial metal.

Futures on Monday hit a fresh low for the year, falling 3.8% to $3.7715 a pound.

Nickel jumped 5.2 percent, the most since May 2010, cotton rallied 3.8 percent and crude oil rose the most in three weeks.
Commodities headed for the biggest gain in almost four weeks, led by metals and crude oil, on speculation that more stimulus and low interest rates aimed at reviving global growth also will boost demand for raw materials.