Copper Extends Drop as China's Futures Clampdown Hurts Sentimentby and
Metals traders also awaiting clues from Fed on rate increases
Antofagasta says copper-price growth likely to remain subdued
Copper fell for a third day, the longest slump in three weeks, after Chinese exchanges stepped up efforts to cool speculation in some commodities and investors awaited a Federal Reserve policy decision.
Bourses in China, the world’s biggest metals consumer, announced further measures to curb speculation in contracts ranging from steel to iron ore and coking coal, including higher fees and a reduction in night hours. The moves add to a raft of changes this month that have made it more expensive for investors to trade.
The steps taken by the exchanges are “having a negative impact on trading in base metals,” Commerzbank AG analysts including Daniel Briesemann said in a note. “In our opinion, the price rise is therefore on a shaky footing and correction potential has built up.”
Copper for delivery in three months slipped 1.2 percent to settle at $4,903 a metric ton ($2.22 a pound) 5:51 p.m. on the London Metal Exchange. The slump comes after copper advanced last week to a one-month high on signs that China’s economy is stabilizing.
In New York, copper futures for July delivery slid 1 percent to settle at $2.2245 a pound on the Comex.
Prices have been weighed down after stockpiles of the metal in warehouses tracked by the LME reached the highest in a month, indicating supplies are more plentiful. Inventories fell 0.2 percent on Wednesday after climbing the previous five days, bourse data show.
Investors are also looking for clues on the pace of interest-rate increases by the Fed, according to Richard Fu, the head of Asia & Pacific at Amalgamated Metal Trading Ltd. U.S. policy makers end a two-day meeting on Wednesday.
For market outlook and other metals:
- Miner Antofagasta Plc said in a statement on Wednesday that growth in copper prices will probably remain “subdued” in the near term.
- Aluminum, zinc, lead and tin declined in London, while nickel gained.