Copper Falls on Continuing Deadlock Over U.S. Borrowing Limit
Copper fell in London, extending last week’s drop, as commodities and equities slumped amid the continuing deadlock over increasing the U.S. government’s debt ceiling, fueling concern about a potential default.
The stalemate between the White House and House Republicans showed little sign of thawing. The U.S. is set to exhaust measures to avoid breaching the ceiling in 10 days. The MSCI All-Country World Index of shares retreated for a third session in four and the Standard & Poor’s GSCI gauge of raw materials declined for a second day in three.
“With the U.S. budget debate at an impasse, the problem will no doubt remain the prime influence on the markets this week,” Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt, said in an e-mailed report today. The nation is the world’s second-largest copper consumer.
Copper for delivery in three months slid 0.7 percent to $7,207 a metric ton by 11:10 a.m. on the London Metal Exchange. Copper for delivery in December fell 0.7 percent to $3.277 a pound on the Comex in New York on trading volume 41 percent below the average for the past 100 days for the time of day, data compiled by Bloomberg show.
Growth in world supply of the metal from mines will reach 4 percent or more a year in 2012-16, topping out next year at 6.1 percent, Standard Bank said today in a report. That compares with gains of less than 1 percent in four of the six years leading up to 2012, it 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.
Copper stockpiles tracked by the LME, at the lowest since March, fell for a 23rd session to 523,425 tons, daily exchange data showed. Orders to remove the metal from warehouses dropped for a fifth session in six to 258,775 tons.
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