Copper prices are falling sharply on growing doubts that demand will increase.

The price of copper for December delivery dropped 20.05 cents, or 6 percent, to settle at $3.0575 a pound.

Copper prices are closely tied to economic activity. The metal is used in everything from electronics products to new housing. Copper prices have been rising this month on the expectation that demand would increase from U.S. home builders, and from reconstruction in Japan after that nation's tsunami disaster.

A government report said Thursday home sells fell in September. Home sales are in line to match last year's level, which was the worst in 13 years.

Traders are also worried that reconstruction in Japan won't accelerate until next year.