Copper futures declined for the first time in four sessions on speculation that the Federal Reserve will begin to curb monetary stimulus next week, eroding prospects for higher metal demand.
U.S. service industries expanded in August at the fastest pace in almost eight years, and manufacturing gained, reports showed last week. The Fed will probably cut its monthly bond buying by $10 billion to $75 billion after policy makers meet for two days starting Sept. 17, according to economists in a Bloomberg survey published on Sept. 6. Copper has declined 11 percent this year amid an expanding global surplus.
“The market is continuing to weigh the likelihood that Fed tapering is coming,” Tim Evans, the chief market strategist at Long Leaf Trading Group in Chicago, said in a telephone interview. “That’s going to give us a choppy market for the next week or so.”
Copper futures for December delivery fell 0.5 percent to close at $3.2625 a pound at 1:20 p.m. on the Comex in New York. The metal climbed 1.1 percent in the previous three sessions.
Signs that demand may pick up in China helped limit the decline. In August, industrial production expanded at the fastest pace in 17 months, the government said today.
China is the biggest copper consumer, followed by the U.S.
On the London Metal Exchange, copper for delivery in three months dropped 0.4 percent to $7,170 a metric ton ($3.25 a pound). Aluminum, tin, nickel, zinc and lead also slid.