Copper futures tumbled the most in 15 weeks Wednesday amid speculation that the Federal Reserve will scale back U.S. monetary stimulus this year, while output of the metal rose to a monthly record in China.
Copper futures for December delivery slumped 2.3 percent to settle at $3.1595 a pound at 1:21 p.m. on the Comex in New York, the biggest drop for a most-active contract since July 26. Earlier, the price touched $3.1525, the lowest since Aug. 7.
Tuesday, open interest, or the number of futures contracts yet to be closed, liquidated or delivered, rose to 163,264, the highest since Aug. 14, according to the latest Comex data.
On the London Metal Exchange, copper for delivery in three months fell 2 percent to $6,980 a ton ($3.17 a pound). Aluminum and lead dropped, while nickel, tin and zinc advanced.
A gauge of the six LME metals fell 1.1 percent to the lowest since Aug. 7. The measure has declined 12 percent this year.
Fed Bank of Atlanta President Dennis Lockhart said Tuesday that talks on a cut in bond purchases by the central bank “could well take place” next month. China’s output of refined copper in October climbed 23 percent to 637,000 metric tons from a year earlier. China is the world’s biggest user, followed by the U.S.
Futures have slumped 14 percent in 2013, partly on prospects for increased mine production.
“Imminent tapering and Chinese output surges compounded the weakness,” Michael Turek, a senior director at Newedge Group SA in New York, said in an e-mail. “The markets seem to be getting short enough to set themselves up for a decent year- end rally, but for now, if these markets pick up their heads, they appear likely to get kicked in the teeth.”
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