Copper Falls on Concern That U.S. Shutdown Would Erode Demand

Copper futures fell for the first time in four sessions in New York on mounting concern that a looming government shutdown in the U.S. poses a risk to demand.

A budget stalemate in Congress may lead to the first halt in government operations in 17 years and threatens talks to increase the debt limit. A shutdown would reduce fourth-quarter economic growth by as much as 1.4 percentage points, depending on its length, according to economists including Mark Zandi of Moody’s Analytics Inc. Copper rose as much as 0.3 percent earlier after a private report showed business activity in the U.S. expanded more than forecast in September.

“We’re going to see swings like this in metals until we get some sort of conclusion out of Washington,” Brian Booth, a senior market strategist at Long Leaf Trading Group in Chicago, said in a telephone interview. “Until that is settled, there’s going to be more volatility.”

Copper futures for delivery in December slid 0.2 percent to settle at $3.323 a pound at 1:12 p.m. on the Comex in New York. The metal climbed 2.2 percent in the previous three sessions, and rose 8.7 percent this quarter.

The U.S. is the world’s biggest copper consumer after China. A shutdown may cut U.S. growth as output is lost when workers are furloughed, subtracting from gross domestic product.

The Standard & Poor’s GSCI Index of 24 commodities fell as much as 1.1 percent.

On the London Metal Exchange, copper for delivery in three months rose less than 0.1 percent to $7,302 a metric ton ($3.31 a pound).

Aluminum, lead and zinc increased, while nickel fell. Tin was unchanged.

Markets in China will be closed Oct. 1-7 for National Day holidays.

Before it's here, it's on the Bloomberg Terminal.