Industrial Metals Slide as Fed's Rate Increase Spurs Dollar Gainby
Freeport shares fall to lowest since 2002 as miners slump
`Limited headroom for metals' as dollar climbs: Turek
Most industrial metals fell as the dollar strengthened in the wake of the Federal Reserve’s first U.S. interest-rate increase in almost a decade.
Tighter U.S. monetary policy spurred gains for the dollar, which headed for its longest rising streak since October. A stronger greenback cuts the appeal of metals and other commodities as stores of value. Mining shares retreated, with the Bloomberg Americas Mining Index falling as much as 5.1 percent.
“There appears to be limited headroom for metals while being long the dollar remains the trade,” Michael Turek, the head of base metals at BGC Partners Inc. in New York, said in an e-mail.
Copper futures for March delivery fell 1.4 percent to settle at $2.0435 a pound at 1:13 p.m. on the Comex in New York. Prices have tumbled 28 percent this year as the economy cooled in China, the world’s biggest consumer.
The Bloomberg Americas Mining Index slumped 38 percent in 2015 as lower metal prices eroded profits. Freeport-McMoRan Inc., the world’s biggest publicly traded copper producer, fell as much as 8.8 percent on Thursday, reaching the lowest since 2002.
On the London Metal Exchange, zinc dropped as much as 3 percent to $1,474 a metric ton, the lowest since 2009. Aluminum, copper, nickel, tin and lead also fell on the LME.