Copper declined for a second day on concerns that the U.S. Federal Reserve may scale back stimulus measures and that further signs of slowdown in China, the biggest user, will curb demand for the metal.
Copper for delivery in three months fell as much as 0.5 percent to $7,047.50 a metric ton on the London Metal Exchange and was at $7,076.75 at 1:50 p.m. in Shanghai. Futures for delivery in September on the Comex in New York lost 0.2 percent to $3.204 a pound.
The Federal Open Market Committee begins its two-day policy meeting today. Chairman Ben S. Bernanke indicated on May 22 that stimulus aimed at bolstering the world’s largest economy could be scaled back if the employment outlook shows “sustainable improvement.” The central bank currently buys $85 billion a month of Treasury and mortgage debt.
“Copper is likely to be capped in a range in the short term,” said Cao Yanghui, an analyst at Nanhua Futures Co. “Investors seem to have lost the interest as there are more negative factors than positive ones now.”
China’s new home prices rose in almost all cities in May, led by major centers, as the government’s latest property measures failed to deter buyers. Prices gained in 69 cities out of 70 cities tracked by the government in May from a year ago, data showed today. That compared with 68 cities a month earlier.
The October futures contract on the Shanghai Futures Exchange declined 1.2 percent to 51,090 yuan ($8,335) a ton.
On the LME, nickel, lead and tin declined, while zinc and aluminum were little changed.