Copper Falls Before China PMI Data Amid Fed Tapering Outlook

Copper declined after minutes from the Federal Reserve’s last meeting signaled U.S. stimulus may be cut in coming months and ahead of a private manufacturing gauge for China today.

The contract for delivery in three months on the London Metal Exchange dropped as much as 0.7 percent to $6,950 a metric ton and traded at $6,954.75 at 10:34 a.m. in Tokyo. The metal fell 12 percent this year.

Policy makers expected economic data to signal further improvement in the job market and “thus warrant trimming the pace of purchases in coming months,” minutes of the Fed’s October meeting showed yesterday. The HSBC Holdings Plc/Markit Economics purchasing managers’ index may come in at 50.8 for November from 50.9 in October, according to the median of 18 economists’ estimates compiled by Bloomberg. Readings above 50 signal expansion.

“The Fed minutes indicated U.S. stimulus will be tapered in coming months, weighing on copper prices,” said Kazuhiko Saito, an analyst at commodities broker Fujitomi Co. in Tokyo. Investors were also watching the private report on China’s manufacturing, he said.

Copper for delivery in February on the Shanghai Futures Exchange slid 0.8 percent to 49,940 yuan ($8,195) a ton. Futures for delivery in March lost 0.4 percent to $3.157 a pound on the Comex in New York.

On the LME, lead also declined, while aluminum, nickel and zinc were little changed. Tin hadn’t traded.

To contact the reporter on this story: Jae Hur in Tokyo at jhur1@bloomberg.net

To contact the editor responsible for this story: Brett Miller at bmiller30@bloomberg.net

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