Copper declined in New York amid growing speculation American lawmakers will miss a year-end budget deadline.
Time is running out for U.S. lawmakers and President Barack Obama to agree on a budget deal by year-end to avoid triggering more than $600 billion in tax increases and spending cuts, Senator Joseph Lieberman said. U.S. House Speaker John Boehner failed to garner support from his caucus for “Plan B,” which would have extended tax cuts on incomes below $1 million.
“I presume the main focus will be on the fiscal cliff,” Nic Brown, head of commodity research at Natixis SA in London, said by e-mail today. “It looks very bad the way that we went from almost having a deal, to having a plan-B, to having nothing.”
Copper for March delivery dropped 0.2 percent to $3.559 a pound by 6:42 a.m. on the Comex in New York. The metal is up 3.6 percent this year. Copper for delivery in three months was little changed at $7,825 a metric ton on the London Metal Exchange. Electronic trading on the bourse will shut at 4 p.m. local time.
Copper stockpiles monitored by the LME rose for a 13th day, climbing 1.6 percent to 317,350 tons, the highest since Feb. 7, bourse data show. They’ve fallen 14 percent this year. Orders to withdraw the metal, known as canceled warrants, slid 3.1 percent to 51,600 tons today.
An improvement in end-user demand in China may take longer to “feed through” as accumulated stockpiles gradually run down, according to Brown of Natixis.
Hedge funds boosted bets on a rally on speculation demand in China, the biggest user, will improve next year. Money managers raised net-long positions, or wagers on rising prices, by 11 percent to 24,531 U.S. futures and options in the week to Dec. 18, the highest level since August 2011, according to the U.S. Commodity Futures Trading Commission.
Aluminum, lead and zinc rose in London. Nickel and tin fell.
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