Lead Touches Two-Year Low as Metals Fall Before FedJoe Deaux and Agnieszka de Sousa
Lead prices dropped to a 28-month low on concern that demand will ebb in China, the world’s largest consumer, while some industrial metals fell on concern that the Federal Reserve is moving closer to boosting interest rates.
Yesterday, a Chinese manufacturing gauge in December fell to a seven-month low, a report showed. The Fed ends a two-day meeting today. Sixty-eight percent of economists surveyed by Bloomberg News said policy makers will drop a pledge to keep rates near zero percent for a “considerable time.” Nickel and tin prices dropped in London.
“It’s a dirty day of trading” before the Fed meeting, Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview. “And ultimately the concern is that Chinese metal demand is not going to materialize to the same extent.”
Lead for delivery in three months dropped 1.9 percent to settle at $1,884 a metric ton at 5:50 p.m. on the London Metal Exchange. Earlier, the price touched $1,871, the lowest since Aug. 17, 2012. This year, the commodity has declined 15 percent.
“There is this perception among investors that demand prospects are not as good as they were,” Stephen Briggs, an analyst at BNP Paribas SA in London, said in a telephone interview.
On the LME, copper rose less than 0.1 percent to to $6,368 a ton ($2.89 a pound). Aluminum climbed, and zinc was unchanged.
Copper futures for March delivery advanced 0.4 percent to $2.8705 a pound on the Comex in New York. Earlier, the price touched $2.827, the lowest for a most-active contract since Dec. 1.