Copper fell for the second time in three days as U.S. industrial production unexpectedly contracted and on concern that lawmakers may be unable to avoid a so-called fiscal cliff of spending cuts and tax increases.
Output at factories, mines and utilities dropped 0.4 percent last month, Federal Reserve data showed today. Economists forecast a 0.2 percent gain in a Bloomberg survey. President Barack Obama and Congressional leaders held a first round of talks aimed at avoiding a $607 billion deficit-cutting package known as the fiscal cliff.
“There are concerns about demand in general as we continue to get signs of weakness in the global economy,” Frank Cholly, a senior commodity broker at RJO Futures in Chicago, said in a telephone interview.
Copper futures for delivery in March slid 0.3 percent to settle at $3.4615 a pound at 1:10 p.m. on the Comex in New York. The contract still rose 0.2 percent this week, the first increase in six weeks.
Superstorm Sandy cut total production by almost 1 percentage point in October, the Fed said.
“Sandy crushed output in the Northeast, and it will be months before we can determine the true state of the nation’s industrial base,” Joel Naroff, the president of Naroff Economic Advisors Inc. in Holland, Pennsylvania, said in a note.
Copper also retreated as the dollar strengthened for a seventh session in eight against a basket of six currencies, reducing the appeal of commodities as alternative investments.
Stockpiles monitored by the London Metal Exchange rose 0.7 percent to 255,175 metric tons, capping a third straight weekly advance, the longest increase since June.
On the LME, copper for delivery in three months fell 0.5 percent to $7,605 a ton ($3.45 a pound). Aluminum, tin, lead and zinc also dropped in London. Nickel advanced.