Copper dropped for a second day amid speculation the Federal Reserve will start reducing stimulus earlier than previously expected and as output of the metal rose to a monthly record in China, the largest user.
The contract for delivery in three months on the London Metal Exchange fell as much as 0.6 percent to $7,077.50 a metric ton, the lowest level since Sept. 18, and traded at $7,093 by 10:31 a.m. in Tokyo. The metal has declined 11 percent this year.
Fed Bank of Atlanta President Dennis Lockhart said yesterday a reduction in U.S. bond purchases “could very well take place” next month. Refined-copper output in October climbed 23 percent to 637,000 tons from a year earlier, according to data from China’s National Bureau of Statistics. That was 2.6 percent higher than the previous all-time high of 621,000 tons in September.
“Concern about earlier-than-expected tapering of Fed stimulus is back,” said Hwang Il Doo, a senior trader at Korea Exchange Bank Futures Co. in Seoul. An increase in China’s output also put downward pressure on the market as the country may import less in coming months, he said.
Fed policy makers will pare the monthly pace of bond buying to $70 billion at their March 18-19 meeting, the median of 32 economist estimates in a Bloomberg News survey on Nov. 8 shows. The group next meets Dec. 17-18.
China elevated the role of markets in the nation’s economic strategy, while stopping short of unveiling detailed policy shifts, after President Xi Jinping oversaw a four-day gathering of Communist Party leaders in Beijing.
The nation will make markets “decisive” in allocating resources, while the state will remain “dominant” in the economy, according to yesterday’s communique from the third full meeting, or plenum, of the party’s 18th Central Committee.
Copper for delivery in January on the Shanghai Futures Exchange sank 1.1 percent to 50,940 yuan ($8,362) a ton. Futures for delivery in December declined 0.7 percent to $3.213 a pound on the Comex in New York.
On the LME, lead also dropped, aluminum and zinc were little changed, and nickel rose. Tin hadn’t traded.
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