Copper futures dropped the most in a week as signs of low US inflation cut demand for commodities as a store of value.
The cost of living declined 0.2 percent in August, the first decrease since April 2013, Labor Department data showed today. The Bloomberg Commodity Index of 22 raw materials fell for the first time in three days.
“With low inflation rates, you’re not going to see copper take off to the upside,” Adam Klopfenstein, a senior market strategist at Archer Financial Services in Chicago, told Bloomberg News. “In a deflationary environment or a low-inflation environment, the interest in owning commodities diminishes,” he said in an e-mail.
Copper futures for December delivery fell 0.7 percent to settle at $3.1435 a pound at 1:11 p.m. on the Comex in New York, the biggest drop for a most-active contract since Sept. 9.
Rising 2.1 percent to close at $3.87 per pound, US copper producer grade 110 price experienced the biggest change for Wednesday, September 17. After a 2.1 percent increase, the price of US copper producer grade 122 finished the day at $3.87 per pound. At $4.06, the price of US copper producer grade 102 finished the market day up 2.0 percent per pound. The Japanese copper cash price remained essentially flat at JPY 767,000 ($7,158) per metric ton.
Chinese copper prices were mixed for the day. Chinese copper bar prices rose 1.3 percent to CNY 50,860 ($8,282) per metric ton. The cash price of Chinese copper rose 1.3 percent to CNY 51,060 ($8,315) per metric ton. The price of Chinese copper wire saw little movement at CNY 50,395 ($8,206) per metric ton. For the fifth day in a row, the price of Chinese bright copper scrap remained essentially flat at CNY 44,300 ($7,214) per metric ton.
On the LME, the primary copper cash price gained 0.7 percent to finish at $6,895 per metric ton. Also on the LME, the 3-month price of copper increased 0.5 percent to $6,857 per metric ton.