Copper futures fell to a one-week low after manufacturing shrank more than estimated in China and some Federal Reserve officials advocated further curbing of U.S. economic stimulus.
A Chinese factory gauge today from HSBC Holdings Plc and Markit Economics showed a preliminary February reading of 48.3, below the 49.5 estimate from economists surveyed by Bloomberg. A level under 50 indicates contraction. Some Fed officials said “there should be a clear presumption in favor” of more reductions, minutes of January’s policy meeting showed.
“We are seeing weakness across the commodity board” on concern that demand will ease in China, Edward Meir, an analyst at INTL FCStone Inc. in New York, said in a report. “The Fed’s strategy of categorically staying the course for the time being sounded slightly more hawkish than some were expecting.”
Copper futures for May delivery fell 0.3 percent to settle at $3.261 a pound at 1:08 p.m. on the Comex in New York. Earlier, the price touched $3.2365, the lowest since Feb. 13.
On the London Metal Exchange, copper for delivery in three months dropped 0.4 percent to $7,155 a metric ton ($3.25 a pound).
China is the world’s biggest user. The government reduced this year’s target for expansion in factory output to 9.5 percent, compared with 10 percent last year.
“The Chinese economy is further cooling,” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said in a report. “The Chinese central bank is also playing its part in this, having withdrawn liquidity from the interbank market twice in short succession.”
The Fed lowered its monthly bond purchases by $10 billion at the January meeting to $65 billion, matching a December reduction. The U.S. is the second-biggest copper consumer.
Aluminum gained in London while zinc, tin, nickel and lead declined.