Copper declined to a seven-week low as industrial metals dropped after Federal Reserve Chairman Ben S. Bernanke said bond purchases may be reduced and as China’s manufacturing is slowing. Nickel fell to the lowest since 2009.
Copper for delivery in three months fell as much as 1 percent to $6,888.25 a metric ton on the London Metal Exchange, the lowest since May 3, and was at $6,902 at 10 a.m. in Shanghai. Metal for delivery in September on the Comex in New York dropped 0.9 percent to $3.1225 per pound.
Bernanke said the central bank may start dialing down its unprecedented bond-buying program this year and end it entirely in mid-2014. The Federal Open Market Committee left the monthly pace of bond purchases unchanged at $85 billion for now.
“Now that the Fed has given a rather clear timetable, it may be difficult for copper to find support at the current level,” Lian Zheng, an analyst at Xinhu Futures Co., said by phone from Shanghai. “One of the drivers for high copper prices in past few years was the liquidity, or a relatively weak dollar, but things are changing.”
China’s manufacturing is shrinking at a faster pace this month, adding to signs that a growth slowdown is deepening in the world’s second-largest economy.
The preliminary reading of 48.3 for a Purchasing Managers’ Index released today by HSBC Holdings Plc and Markit Economics compares with the 49.1 median estimate in a Bloomberg News survey of 15 economists. May’s final reading of 49.2 was the first below 50 since October, indicating contraction.
Copper for delivery in October on the Shanghai Futures Exchange fell 2 percent to 49,910 yuan ($8,140) a ton.
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