Copper sags on low US industrial output

Copper fell, heading for the biggest decline in more than a week, as US industrial production unexpectedly contracted and on concern that lawmakers may be unable to avoid a so-called fiscal cliff of spending cuts and tax increases.

Output at factories, mines and utilities dropped 0.4 per cent last month, Federal Reserve data showed yesterday, trailing the 0.2 per cent gain forecast in a Bloomberg survey of economists. President Barack Obama will hold an opening round of discussions with Congressional leaders yesterday to reach a deal to avoid a $607 billion deficit-cutting package known as the fiscal cliff. The Standard & Poor’s 500 index fell for a fourth day and touched the lowest since July 26.

“The equities market has been in a tailspin since the election, with all the talk over the fiscal cliff making markets skittish,” Frank Cholly, a senior commodity broker at RJO Futures in Chicago, said in a telephone interview. “There are concerns about demand in general as we continue to get signs of weakness in the global economy.”

Superstorm Sandy cut total production by almost one percentage point in October, the Fed said.

“Sandy crushed output in the Northeast, and it will be months before we can determine the true state of the nation's industrial base,” Joel Naroff, president of Naroff Economic Advisors Inc in Holland, Pennsylvania, said in a note.