BLBG:Copper Drops Before ECB, Federal Reserve Policy Makers Gather
Copper fell in London for a first session in five before meetings this week of central bankers that may result in fresh steps to counter the euro-area debt crisis and economic slowdown that threaten demand.
European Central Bank policy makers will gather Aug. 2, the day after a two-day Federal Reserve meeting ends. ECB President Mario Draghi is attempting to build consensus for a plan to ease euro-area borrowing costs and pledged last week to do whatever is needed to preserve the currency bloc.
“The ECB and Federal Reserve policy statements are likely to prove crucial,” James Moore, an analyst at Basemetals.com in London, said in a report today. “Suggestions and timescale for further stimulus measures are likely to provide further upside momentum to the metal markets.”
Copper for three-month delivery slid 0.5 percent to $7,525 a metric ton by 9:49 a.m. on the London Metal Exchange. The September-delivery contract fell 0.4 percent to $3.412 a pound on the Comex in New York.
“We are going through a seasonally weak patch for the copper market,” Nikos Kavalis, an analyst at Royal Bank of Scotland Group Plc in London, said by phone. “This inevitably impacts on the price and leaves it vulnerable to macro-fueled fluctuations.”
The ECB will hold its main refinancing rate at 0.75 percent, according to economists surveyed by Bloomberg News. The Fed will maintain its key interest rate in a range of zero to 0.25 percent, economists said. Figures due this week may show hiring in the U.S. reached 100,000 for a first month in four in July, according to a Bloomberg survey.
Copper inventories tracked by the LME fell 0.5 percent to 249,075 tons, the lowest level since June 14, daily exchange figures showed. Stockpiles are down 33 percent this year.
Aluminum, zinc, tin, lead and nickel slid in London. Some users experienced problems connecting to the LME’s Select electronic trading system starting at about 7:30 a.m. local time. The issue was resolved by 7:55 a.m., exchange spokeswoman Miriam Heywood said by e-mail.
To contact the reporter on this story: Tom Metcalf in London at tmetcalf7@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
