BLBG:Copper Falls as Reviving U.S. Economy Fuels Tapering Speculation
Copper fell for a second day in London as signs the U.S. economy is strengthening fueled speculation the Federal Reserve will start slowing stimulus in the second-biggest consumer of the metal.
U.S. manufacturing unexpectedly sped up at the fastest pace in more than two years in November, according to data yesterday. Service industries, making up the biggest part of the nation’s economy, continued to expand last month, a Bloomberg survey of economists showed before a report tomorrow. The Fed’s next monetary-policy meeting will take place Dec. 17-18.
“We are seeing economic data continuing to improve,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said by e-mail. The run of reports “highlights concerns about early tapering,” he said.
Copper for delivery in three months slumped 0.2 percent to $6,961 a metric ton by 10:10 a.m. on the London Metal Exchange after reaching $6,954.50, the lowest since Nov. 21. Prices retreated 12 percent this year, set for a second annual drop in three. Copper for delivery in March fell 0.4 percent to $3.1685 a pound on the Comex in New York.
Minutes of the previous Fed meeting released in November showed that policy makers may reduce the central bank’s $85 billion-a-month debt purchases “in coming months” as the economy improves. Figures this week may show that the U.S. is on track for the biggest annual gain in payrolls since 2005.
Copper inventories tracked by the LME, at the lowest since February, dropped for a 22nd session to 418,750 tons, according to daily data. Orders to draw the metal from warehouses rose 2.6 percent, the most in more than two weeks, to 269,150 tons on bookings in New Orleans that are at a record high.
Aluminum for delivery in three months slid as much as 0.3 percent to $1,737 a ton in London after trading yesterday at the lowest level since July 2009. Lead, zinc, nickel and tin fell.
To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net
To contact the editor responsible for this story: John Deane at jdeane3@bloomberg.net
