Copper Declines Before Release of Fed Minutes on Policy Meeting

Jan 08, 2014 1:56 pm ET

Jan. 8 (Bloomberg) -- Copper futures fell for the first time in three days before the release of minutes from the Federal Reserve’s December meeting, which may give indications on the pace of U.S. monetary stimulus.

The Fed last month decided to cut monthly debt purchases by $10 billion to $75 billion. The Fed may scale back buying in increments of $10 billion before ending stimulus late in the year, according to a Bloomberg News survey of analysts. Employers added more workers in December than economists forecast, a private report showed today.

“The Fed has said tapering will depend on the data, and it looks now like the economy has some momentum,” Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview. “Tapering may be accelerated, which is negative for copper.”

Copper futures for March delivery fell 0.5 percent to settle at $3.3425 a pound at 1:18 p.m. on the Comex in New York.

The Fed has signaled that stimulus would be linked to improvements in the labor market. Companies added 238,000 workers in December, the most in more than a year, after a revised 229,000 gain in November that was higher than estimated, the ADP Research Institute said today.

The December tally exceeded the most-optimistic forecast in the Bloomberg survey. The median projection called for a 200,000 advance.

Indonesia’s government is proposing that mining companies be allowed to continue shipping mineral concentrates for three years, easing concern that copper exports may be disrupted before a ban on raw ores takes effect.

On the London Metal Exchange, copper for delivery in three months declined 0.1 percent to $7,344.50 a metric ton ($3.33 a pound). Aluminum, lead and zinc dropped, while tin and nickel advanced.

--With assistance from Agnieszka Troszkiewicz in London. Editor: Patrick McKiernan