Copper futures fell the most in eight weeks amid signs of a slowing economy in China and speculation that the Federal Reserve will curb U.S. monetary stimulus, damping prospects for metal demand.
In December, China’s producer prices, a measure of the cost of goods as they leave the factory, extended the longest slide since the 1990s, adding to evidence that the economy weakened. Fed officials saw diminishing economic benefits from the its debt purchases, according to minutes of last month’s policy meeting released yesterday.
“Metals are taking their cue from China-related concerns,” Edward Meir, an analyst at INTL FCStone in New York, said in a report. “The eagerly awaited Federal Reserve minutes showed a central bank that is now intent on proceeding with its tapering program.”
Copper futures for March delivery fell 1.3 percent to settle at $3.299 a pound at 1:14 p.m. on the Comex in New York, the biggest decline for a most-active contract since Nov. 13. China is the world’s top user of the metal, followed by the U.S.
The Fed cut its monthly bond-buying by $10 billion to $75 billion at the meeting, citing labor-market gains. Improvements in the economy may be prompting employers to retain workers. Applications for unemployment benefits fell 15,000 to 330,000 in the week ended Jan. 4, the lowest in a month, a government report today showed.
On the London Metal Exchange, copper for delivery in three months fell 1.8 percent to $7,213 a metric ton ($3.27 a pound). Nickel and aluminum dropped to the lowest in more than a month, while tin, lead and zinc declined.
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