Copper extended declines, heading for the biggest loss since March amid concerns over the pace of economic recovery as traders looked for signs of progress in US fiscal-stimulus talks.
US manufacturing expanded in September by less than forecast, according to a report Thursday, while US initial jobless claims remained well above pre-virus levels. Lawmakers in the US House postponed a vote Wednesday on a stimulus bill to give Treasury Secretary Steven Mnuchin and Speaker Nancy Pelosi one more day to negotiate a compromise.
Copper, considered an economic barometer, has risen for six straight months in a bet on improving global growth and tight supplies. Now, investors say further stimulus is needed as layoff announcements from companies including United AirlinesHoldings, Walt Disney and Royal Dutch Shell fuel growth concerns.
“The short-term catalyst in the markets is the ongoing stimulus talks and whether they result in an agreement,” Edward Meir, an analyst at ED&F Man Capital Markets, said in a report.
Meanwhile, an eight-day holiday in China has sidelined the biggest copper consumer. Copper also came under pressure Thursday as dollar losses ebbed.
Copper for three-month delivery slid 4.2% to $6 389.50 a metric ton at 4 p.m. in London. A close at that price would mark the biggest decline since March 18.
Other base metals fell, with zinc down 2.7% and aluminum down 1.6%.