Copper crumbles over debt ceiling

The price of copper is 1.8% weaker as traders worry about future demand with the debt-ceiling deadline approaching.

Dealers are still apprehensive about the warring Democrats and Republicans being unable to come to an agreement over the debt ceiling, and this is casting doubts over the nation’s demand for copper.

Two years ago the US government decided to increase the debt ceiling which resulted in the US being stripped of its triple A rating. It is possible that both parties will come to an agreement and we will not have a repeat of 2011, but fear is getting the better of investors.

Over the weekend the HSBC China composite PMI came in at 51.2 for September, which compares with 51.8 in August. The report measures both manufacturing and services in China. Though any reading above 50.0 indicates an expansion, dealers are worried that China’s booming days are over.

High grade copper chart

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