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Copper fell for a third session in New York on speculation the Federal Reserve will slow the pace of economic stimulus in the U.S., the world’s second-biggest consumer of the metal.
Richard Fisher, president of the Fed’s Dallas branch, said today he wouldn’t rule out backing a reduction by March of the central bank’s $85 billion-a-month debt-buying, depending on economic conditions. James Bullard, head of the St. Louis Fed, said three days earlier an improving labor market might warrant less stimulus.
“The market might be sensitive to one or two Fed official comments on QE tapering from time to time,” Richard Fu, director for Asian commodity trading at Newedge Group SA in London, said in a note today.
Copper for delivery in December slumped 0.6 percent to $3.279 a pound by 7:43 a.m. on the Comex in New York. Copper for delivery in three months fell 0.6 percent to $7,198 a metric ton on the London Metal Exchange.
Fed policy-makers decided last week to maintain the rate of stimulus. The central bank will only start slowing the purchases in March, a Bloomberg survey of economists showed last month. Communist Party leaders in China, the biggest copper user, will enter a policy-making summit this week with services and manufacturing surveys showing a strengthening economy.
Copper stockpiles monitored by the LME fell 0.4 percent to 474,675 tons, daily data showed. Inventories in New Orleans, the biggest repository for the metal, gained for a fourth session after 29 straight drops. Orders to take the metal from warehouses fell 1 percent to 285,025 tons.
Tin for delivery in three months fell 0.2 percent to $22,750 a ton on the LME, erasing a climb of as much as 0.6 percent. The metal for immediate delivery traded at a $9.60-a-ton premium to the three-month contract. Backwardation, or prices for earlier deliveries above later contracts, usually indicates limited supplies.
Nickel, lead, zinc and aluminum reached two-week lows in London. - Bloomberg.com
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