Copper fell to the lowest in more than a week in New York as signs of a strengthening economy fueled speculation that the Federal Reserve will curb stimulus in the U.S., the world’s second-biggest user of the metal.
U.S. manufacturing unexpectedly accelerated at the fastest pace in more than two years in November, according to Institute of Supply Management data yesterday. Service industries, making up the biggest part of the nation’s economy, continued to expand last month, a Bloomberg survey of economists showed. The Fed’s next monetary-policy meeting will take place Dec. 17-18.
“Good manufacturing numbers turn into bad news for metals as long as the Fed holds the tapering cards,” Michael Turek, a senior director at Newedge Group SA in New York, said in an e-mail.
Copper futures for delivery in March slumped 0.5 percent to settle at $3.1675 a pound at 1:20 p.m. on the Comex in New York, after touching $3.158, the lowest since Nov. 21. Prices have retreated 13 percent in 2013, heading for a second drop in three years.
Minutes of the previous Fed meeting released in November showed that policy makers may reduce the central bank’s $85 billion in monthly debt purchases “in coming months” as the economy improves. Figures this week may show that the U.S. is on track for the biggest annual gain in payrolls since 2005.
Copper inventories tracked by the London Metal Exchange dropped for a 22nd session to 418,750 metric tons, the lowest since February, according to daily data. Orders to draw the metal from warehouses rose 2.6 percent, the most in more than two weeks, to 269,150 tons, on bookings in New Orleans that are at a record.
On the LME, copper for delivery in three months fell 0.2 percent to $6,960 a ton ($3.16 a pound).
Nickel, lead, tin, zinc and aluminum were also lower in London.
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