watch for $2.50. Copper Falls to 8-Month Low on Housing Slowdown, Supply Gain By Millie Munshi Jan. 4 (Bloomberg) -- Copper fell to an eight-month low in New York, extending a slide that began in May, as a slowdown in U.S. housing and rising inventories fueled concern that demand will lag behind supply. Prices have fallen 36 percent from a record high on May 11 as new-home construction in the U.S. fell the most in 15 years and global stockpiles of the metal rose to the highest levels in more than a year. Builders are the biggest users of copper in the U.S., the world's second-largest consumer. ``It's going to be a long time before residential housing bounces back,'' said Michael Smith, owner of T&K Futures and Options Inc. in Port Saint Lucie, Florida. ``Housing is such a big consumer. It's going to be tough on old copper, unless something changes.'' Copper for delivery in March fell 4.7 cents, or 1.8 percent, to $2.602 a pound on the Comex division of the New York Mercantile Exchange. Prices earlier touched $2.5565, the lowest since April 5. The metal plunged 7.7 percent yesterday, the biggest drop since June. Copper futures still gained 40 percent last year on supply disruptions. The U.S. economy has been dragged down by the biggest decline in home building since 1991, which shaved 1.2 percentage points off of growth in the third quarter. Construction Spending U.S. construction spending fell for a third month in November, led by a drop in homebuilding, the Commerce Department said yesterday. Spending on private residential construction fell 1.6 percent, the eighth-straight drop. The average U.S. home contains about 400 pounds of copper. Stockpiles have risen ``because of the lack of use of copper in the housing industry,'' said Smith. ``There's no way demand is outstripping supply.'' Inventories monitored by warehouses in London, Shanghai and New York are at the highest levels since June 2005. Stockpiles monitored by the London Metal Exchange have doubled in the last year. ``Stockpiles continue to rise and it's continuing to hammer on prices,'' said Stuart Flerlage, managing principal at NuWave Investment Corp. in New York. ``This is going to keep happening until we see a significant drop in inventories.'' On the LME, copper for delivery in three months fell for a third session, dropping $140, or 2.4 percent, to $5,715 a metric ton at 6:58 p.m. in London. The metal declined below $6,000 a ton yesterday for the first time since April. Smith said he hasn't held copper contracts for any of his clients since November because he thought prices would ``be crashing.'' Global Demand Copper has gained more than four-fold in the last five years as demand boomed in China, the world's largest consumer of the metal. Producers including Codelco, the world's largest, and BHP Billiton Ltd. are raising output to take advantage of prices that are still above historical averages. ``Since we've had these huge spikes in prices, production has gone up wherever possible,'' David Threlkeld, president of Resolved Inc. in Scottsdale, Arizona, said in an interview. ``A guy with a donkey and a pick axe and a shovel could become a multimillionaire at these prices, so people will produce metal wherever possible.'' A futures contract is an obligation to buy or sell a commodity at a fixed price for delivery by a specific date.