Feb. 11 (Bloomberg) -- Copper futures fell for a second day in New York after Federal Reserve Chairman Janet Yellen said she expects policy makers to continue scaling back U.S. monetary stimulus.
Yellen, delivering her first public remarks as Fed chief, anticipates “a great deal of continuity” in the central bank’s approach to monetary policy, and will maintain the plan to pare bond purchases “in measured steps,” she said today in the text of remarks to Congress. The Fed cut its bond purchases by $10 billion for a second month on Jan. 29. Copper fell in January by the most in seven months amid concern that reduced stimulus will slow growth and curb demand for metals.
“The market thought she might send some kind of signal of a pause to the tapering, and we didn’t see that signal,” Phil Streible, a senior commodity broker at R.J. O’ Brien & Associates in Chicago, said in a telephone interview. “It’s just a disappointment for the market.”
Copper futures for delivery in March fell 0.3 percent to settle at $3.215 a pound at 1:21 p.m. on the Comex in New York. Yesterday, prices dropped 0.4 percent.
On the London Metal Exchange, copper for delivery in three months slipped 0.3 percent to $7,076 a metric ton ($3.21 a pound).
Base metals also declined on concern that demand in China, the world’s biggest user, may weaken after the nation’s banking regulator ordered some smaller lenders to set aside more funds to avoid a cash shortfall.
“That’s going to play a negative role, as far as physical demand is concerned,” Streible said. “That would mean less money allocated toward construction of new buildings and other projects.”
While Yellen said the Fed has been closely monitoring the volatility in financial markets, these developments don’t pose “a substantial risk” to the U.S. outlook, she said.
Nickel, tin and zinc fell in London, while aluminum and lead gained.
--With assistance from Alfred Cang in Shanghai and Maria Kolesnikova in London. Editors: Joe Richter, Patrick McKiernan