Copper futures fell in New York for the second time in three sessions on concern that a congressional impasse over increasing the U.S. debt ceiling poses a risk to global growth.
There are signs that a congressional budget stalemate that partially shut the federal government may carry over to talks on raising the debt ceiling. House Speaker John Boehner said the U.S. could end up in default unless President Barack Obama negotiates, and Treasury Secretary Jacob J. Lew reiterated that the country will run out of its ability to borrow on Oct. 17.
“There’s the potential for a slowdown as this thing drags on,” Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago, said in a telephone interview. “The overhanging concern is that at a minimum you’ll have lingering effects on the economy at this point, even if they do manage to come to an agreement.”
Copper futures for delivery in December slid 0.1 percent to settle at $3.2965 a pound at 1:12 p.m. on the Comex in New York. The metal dropped 0.9 percent last week.
Trading was 36 percent below the average for the past 100 days, data compiled by Bloomberg show.
Futures also retreated as Standard Bank said in a report that growth in world supply of copper from mines will reach 4 percent or more annually in 2012-16, topping out next year at 6.1 percent. That compares with gains of less than 1 percent in four of the six years leading up to 2012, the bank said.
“One of the main reasons that copper prices have come under such sustained pressure is the realization that there is no holding back the rising tide of concentrate supply,” Standard Bank said. Concentrate is partly processed ore shipped to smelters from mines.
On the London Metal Exchange, copper for delivery in three months dropped 0.2 percent to $7,245 a metric ton ($3.29 a pound). Aluminum, lead and zinc gained, while nickel and tin fell. Markets in China, the world’s biggest copper consumer, will reopen tomorrow after closing since Oct. 1 for national holidays.