Copper Drops for Second Day as U.S. Deadlock Dims OutlookJoe Richter
Copper futures dropped for the second straight day on concern that demand will ebb as the budget and debt impasse damps the economy in the U.S., the world’s second-biggest consumer of the metal.
Senate Majority Leader Harry Reid said the Republican-controlled House should vote to end the government shutdown and drop demands to change the 2010 Affordable Care Act. House Speaker John Boehner said Reid and President Barack Obama should negotiate. The U.S. deadlock has delayed economic reports.
“The budget concerns are tempering risk-taking across markets,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a telephone interview. “It’s stopped the flow of economic reports, and at this point in the year, fund managers are going to sit on the sidelines rather than guessing on economic data.”
Copper futures for December delivery declined 0.1 percent to settle at $3.2925 a pound at 1:16 p.m. in New York on the Comex. The price dropped 0.1 percent yesterday. China is the top user of industrial metals.
Senate Democrats are planning a test vote before the end of this week on a measure that would grant authority to the White House on raising the $16.7 trillion debt ceiling.
Federal Reserve Bank of Dallas President Richard Fisher said yesterday the U.S. “cannot afford to default” and that debt-ceiling talks “will come down to the wire.” The country’s borrowing authority is set to lapse Oct. 17.
The International Monetary Fund cut its global outlook for this year and next as capital outflows weaken emerging markets and warned that a U.S. government default could “seriously damage” the world economy.
On the London Metal Exchange, copper for delivery in three months dropped 0.1 percent to $7,239.50 a metric ton ($3.28 a pound). Aluminum, lead and zinc rose, while nickel and tin fell.