BLBG:Copper Drops From Six-Week High Amid U.S. Fiscal Cliff Concern
Copper declined for the first time in four days after touching the highest level in more than six weeks as U.S. manufacturing unexpectedly shrank and a budget standoff intensified. Aluminum, zinc and lead also dropped.
Three-month delivery copper fell as much as 0.4 percent to $7,970 a metric ton on the London Metal Exchange and was at $7,974 at 11:19 a.m. in Tokyo. The metal touched $8,045 yesterday, the highest level since Oct. 19.
U.S. manufacturing contracted last month amid concern about the potential economic fallout from the so-called fiscal cliff. Budget talks became more confrontational as House Republicans rejected President Barack Obama’s demand for higher tax rates, countering with a $2.2 trillion deficit-cutting plan that would trim Medicare and Social Security.
“The U.S. manufacturing data and concern over the fiscal cliff weighed down the metals market,” said Hwang Il Doo, a senior trader at Korea Exchange Bank Futures Co. in Seoul.
The Institute for Supply Management’s factory index fell to 49.5, the lowest since July 2009, from 51.7 in October. The median forecast in a Bloomberg survey called for 51.4. Fifty marks the dividing line between expansion and contraction.
The contract for March delivery fell 0.4 percent to $3.645 a pound on the Comex in New York. March futures retreated 0.3 percent to 57,380 yuan ($9,213) a ton on the Shanghai Futures Exchange.
To contact the reporter for this story: Jae Hur in Tokyo at jhur1@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
