Aluminum Leads Drop in Metals on U.S. Budget, Stimulus Outlook
Aluminum prices in London fell for the first time in a week, pacing losses among industrial metals, amid prospects for a U.S. budget accord and speculation that the Federal Reserve will scale back monetary stimulus.
A budget deal is on track for approval by Congress, ending a cycle of spending standoffs that culminated in the 16-day partial government shutdown in October. The Fed will probably start paring $85 billion in monthly bond purchases following a meeting next week, according to 34 percent of economists surveyed by Bloomberg on Dec. 6, up from 17 percent a month earlier.
“That’s a very big deal for base metals because these markets have been inflated artificially by the Fed printing money,” Fain Shaffer, the president of Infinity Trading Corp. in Indianapolis, said in a telephone interview.
Aluminum for delivery in three months dropped 1.4 percent to $1,791 a metric ton at 5:51 p.m. on the London Metal Exchange. The price rose in the previous four sessions, the longest rally in 10 weeks.
Tin, lead and nickel also dropped.
Zinc rose 0.1 percent to $1,967 a ton. The price climbed for the seventh straight session, the longest rally in eight weeks.
Copper gained 0.1 percent to $7,226 a ton ($3.28 a pound). Earlier, the price reached $7,250, the highest since Nov. 4.
On the Comex in New York, copper futures for March delivery rose less than 0.1 percent to $3.2955 a pound, the fifth straight increase