Copper fell in New York, trimming a second monthly gain, on concern about a potential U.S. default after lawmakers failed to reach agreement on raising the debt ceiling. Republicans led by House Speaker John Boehner were forced to scrap action late last night on passing legislation that is headed for a Senate roadblock. The Treasury Department has set an Aug. 2 deadline for raising the $14.3 trillion debt limit to avert a default. Moody’s Investors Service said it may lower Spain’s sovereign credit rating. “We have still all this trouble on the macroeconomic side, like the debt ceiling in the U.S. and the euro-zone crisis,” said Sven Streitmayer, an analyst at Landesbank Baden- Wuerttemberg in Stuttgart, Germany. Copper for September delivery dropped 2.85 cents, or 0.6 percent, to $4.441 a pound by 7:36 a.m. on the Comex in New York. Prices are up 3.7 percent this month. Copper for three- month delivery slid 0.6 percent to $9,760 a metric ton on the London Metal Exchange. Declines may be limited by concern about supply after workers at Chile’s Escondida, the world’s biggest copper mine, pledged to extend a weeklong strike that’s halted shipments. Escondida, operated by BHP Billiton Ltd., accounts for about a fifth of all copper produced in Chile, the world’s top supplier. 2,500 Tons a Day The industrial action has cut output by about 15,000 tons and losses may be about 2,500 tons for each additional day that the mine is closed, Barclays Capital said yesterday. Concern that supply may fail to meet demand might lift copper next week, according to analysts, investors and traders surveyed by Bloomberg. There is a “battle between the fundamentals on the one hand” and macroeconomic concerns, said Streitmayer at Landesbank Baden-Wuerttemberg. “This is the main point why metals markets are a little bit indecisive.” Nickel for three-month delivery on the LME fell 0.2 percent to $24,505 a ton. A global surplus may narrow on increasing stainless-steel demand from China and stalled mining projects, limiting a decline in prices, said Toru Higo, general manager of nickel sales and raw materials at Sumitomo Metal Mining Co., Japan’s top producer. Supply will likely exceed demand by 20,000 tons this year, he said. Zinc dropped 1.6 percent to $2,479 a ton. Orders to draw the metal from LME warehouses, or canceled warrants, jumped 7.3 percent to 113,850 tons, the highest since April 2006. A total of 8,250 tons were canceled at Johor, Malaysia. Aluminum, lead and tin fell in London. To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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