Copper declined for a third day amid a looming political showdown in Washington over the U.S. budget and as investors examined speeches from Federal Reserve officials for clues on monetary policy.
The metal for delivery in three months on the London Metal Exchange fell as much as 0.9 percent to $7,178 a metric ton and traded at $7,181.50 by 4:20 p.m. in Tokyo. Copper dropped 9.5 percent this year.
House Speaker John Boehner and his Republican caucus are pushing the federal government closer to a shutdown in a fight over funding and the debt limit, Democrats Max Baucus and Patty Murray said in a letter to colleagues yesterday. Investors are considering these political disagreements one week after the Fed unexpectedly maintained $85 billion a month in bond purchases. The U.S. is the second-biggest consumer of industrial metals.
“Concern over the U.S. fiscal situation has damped market sentiment amid a lack of fresh buying incentive before next week’s Chinese holidays,” said Tetsu Emori, the chief fund manager at Astmax Asset Management Inc. Markets in China, the world’s biggest consumer of industrial metals, will be closed from Oct. 1 to Oct. 7 for the National Day holidays.
The metal for delivery in December on Shanghai Futures Exchange fell 0.6 percent to close at 51,750 yuan ($8,456) a ton. Futures for delivery in December slid 0.9 percent to $3.2695 a pound on the Comex in New York.
On the LME, aluminum, zinc, tin, lead and nickel declined.