Copper futures fell to a five-week low on speculation that the Federal Reserve will start to scale back U.S. monetary stimulus after a meeting next week, signaling slower economic growth.
Fed policy makers, meeting for two days starting Sept. 17, probably will cut monthly bond purchases to $75 billion from $85 billion, according to economists in a Bloomberg survey published on Sept. 6. Copper tripled from the end of December 2008 to June 2011 as the central bank pumped more than $2 trillion into the financial system by purchasing debt.
“People are positioning for a tapering announcement, which is construed as a negative for copper,” Matt Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. “The economy at this point has shown enough improvement that they’ll need to lay out a plan to start tapering.”
Copper futures for December delivery fell 0.2 percent to close at $3.2035 a pound at 1:15 p.m. on the Comex in New York. Earlier, the price touched $3.1905, the lowest for a most-active contract since Aug. 8. The metal, down 1.8 this week, has dropped 12 percent in 2013.
Rio Tinto Plc opened a section of its Bingham Canyon copper mine in Utah yesterday after a landslide on Sept. 11 halted operations.
On the London Metal Exchange, copper for delivery in three months declined 0.3 percent to $7,041 a metric ton ($3.19 a pound). Aluminum, lead and zinc fell, while tin and nickel rose.