Copper Pares Best Monthly Gain in Four as U.S. Economy Shrinks
Copper trimmed the biggest monthly advance since September as the U.S. economy unexpectedly shrank in the fourth quarter. Aluminum, zinc and nickel also fell.
Metal for delivery in three months dropped as much as 0.2 percent to $8,207.50 a metric ton on the London Metal Exchange, before trading at $8,212 by 11:01 a.m. Shanghai time. The contract headed for 3.6 percent rally this month. Copper for March delivery on the Comex in New York declined 0.3 percent to $3.7395 per pound.
Gross domestic product fell at a 0.1 percent annual rate, weaker than any economist forecast in a Bloomberg survey and the worst performance since the second quarter of 2009. The Fed will keep buying securities at a rate of $85 billion a month, the Federal Open Market Committee said after a two-day meeting. The dollar traded near a 14-month low versus the euro.
“The rally in the copper price this month is driven by the expectation of a better global economy this year, not by a substantial improvement on the physical market,” Ma Jian, an analyst at Orient Futures Co., said by phone from Shanghai. “Having said that, we still expect it to keep up the relatively strong momentum heading into February.”
Rio Tinto Group, the second-biggest mining company, is considering a temporary halt to construction work at its $6.2 billion Oyu Tolgoi copper and gold project in Mongolia as the government demands a greater share of profit, according to two people familiar with the plans.
The May contract on the Shanghai Futures Exchange rose 0.4 percent to 59,480 yuan ($9,564) a ton.
To contact Bloomberg News staff for this story: Helen Sun in Shanghai at firstname.lastname@example.org
To contact the editor responsible for this story: Brett Miller at email@example.com