Copper Falls a Second Day as Fed-Rate Outlook Damps Commoditiesby
Copper fell for a second day as commodities retreated after the Federal Reserve indicated that it’s still considering an interest-rate increase this year.
The Fed dropped a reference to global risks and referred to its “next meeting” on Dec. 15-16 as it discussed liftoff timing in a statement released Wednesday, preparing investors for the first rate rise since 2006. Such a move would curb the appeal of raw materials because they don’t pay interest or give returns like assets such as bonds. The Bloomberg Commodity Index fell 1 percent.
“The metals and mining sector is again under pressure as the Fed surprisingly leaves a possible rate hike on the table for December,” Michael Turek, the head of base metals at BGC Partners Inc. in New York, said in an e-mail.
Copper for delivery in three months declined 1.4 percent to settle at $5,130 a metric ton ($2.33 a pound) at 5:52 p.m. on the London Metal Exchange. Aluminum, zinc, nickel, lead and tin also dropped on the LME.
The Bloomberg World Mining Index of 81 producers slumped to a three-week low. The gauge is down 26 percent this year as a slowdown in China, the world’s biggest metals user, cut demand. BHP Billiton Ltd., the biggest mining company, slipped 4 percent in London, while Anglo American Plc dropped to the lowest in more than 15 years.
Copper futures for December delivery slid 1.8 percent to $2.321 a pound on the Comex in New York.