Copper futures fell the most in almost four weeks in New York on concern that a government shutdown will slow U.S. economic growth and hinder a global recovery in manufacturing.
U.S. lawmakers passed a deadline without reaching a compromise to keep funding the government. A partial federal government shutdown would cost the U.S. at least $300 million a day in lost economic output, and that amount may accelerate as confidences ebbs, IHS Inc. (IHS) said. The Standard & Poor’s GSCI Index of 24 commodities dropped to a seven-week low.
“There’s a general selling of industrial commodities with the fear that a shutdown will hurt growth,” Bill O’Neill, a partner at Logic Advisors in Upper Saddle River, New Jersey, said in a telephone interview. “These markets don’t have the traditional supply-and-demand fundamentals to give a lot of support right now, so people are focusing on the budget issue.”
Copper futures for delivery in December lost 1.8 percent to $3.2635 a pound at 10:48 a.m. on the Comex in New York, heading for the biggest drop since Sept. 4. Through yesterday, the commodity fell 9 percent this year amid concern that output will exceed demand.
Budget concerns overwhelmed figures showing expansion in U.S., Chinese and European manufacturing and a drop in copper inventories. China is the world’s biggest consumer of the metal.
Stockpiles monitored by the London Metal Exchange slid for a 19th session, to 533,325 metric tons. In the third quarter, inventories tumbled 19 percent, the most in 18 months.
On the LME, copper for delivery in three months slid 1.7 percent to $7,174.75 a ton ($3.25 a pound).
Nickel, tin, lead, zinc and aluminum also declined in London.
Markets in China are closed from today through Oct. 7 for National Day holidays.
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