Copper fell to a one-week low in New York as a jump in stockpiles monitored by the London Metal Exchange and a U.S. budget standoff added to demand concerns.
Inventories in warehouses tracked by the LME rose for an eighth session, climbing 9.5 percent to 298,625 metric tons, the most since Sept. 5, 2008, exchange data showed today. President Barack Obama and House Speaker John Boehner haven’t been able to reach agreement on how to avoid $600 billion in tax increases and spending cuts set to start next month.
“The increase in stockpiles is keeping a lid on things,” Harry Denny, a broker at Hoboken, New Jersey-based PVM Futures Inc., said in a telephone interview. “Also, with the continued uncertainty from the fiscal cliff, people aren’t married to their positions going into year-end.”
Copper futures for March delivery slid 0.3 percent to $3.672 a pound at 12:10 p.m. on the Comex in New York after touching $3.6475, the lowest since Dec. 7.
Inventories tracked by the Shanghai Futures Exchange advanced for a second week, rising 3.7 percent to 205,385 tons, data from the bourse showed Dec. 14.
The rise in copper stockpiles “is the key reason for a weakness at the moment,” Angus Staines, an analyst at UBS AG in London, said by telephone. Demand in China, the biggest buyer of the metal, won’t pick up until the Chinese New Year, celebrated in February, he said.
The U.S. Securities and Exchange Commission approved JPMorgan Chase & Co.’s plan for an exchange-traded fund backed by physical copper.
On the LME, copper for delivery in three months declined less than 0.1 percent to $8,061 a metric ton ($3.66 a pound).
Aluminum and nickel were also lower in London. Tin, lead and zinc rose.
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