Copper has closed sharply lower on the London Metal Exchange (LME) as investors cashed out of commodities after US Federal Reserve Chairman Ben Bernanke laid out a timetable for scaling back the central bank's stimulus program.
At the PM kerb close on Thursday, the LME's three-month copper contract was 2.7 per cent lower on the day at $US6,770 a metric ton. The metal earlier tumbled 3.0 per cent to $US6,750 a metric ton, its lowest price since October 2011.
Aluminum ended the session 1.7 per cent lower at $US1,797.50 a ton.
The moves came as investors digested a monthly monetary policy statement and comments from Bernanke on Wednesday. The Fed chairman said the US central bank could start winding down its $US85 billion-a-month bond-buying program later this year, and even cease the purchases altogether next year if growth picks up, unemployment comes down and inflation moves closer to the central bank's two per cent target.
The Fed's stimulus program has supported growth-sensitive base metals in recent years.
"The base metals complex came under heavy selling pressure in the wake of the Federal Open Market Committee meeting and Ben Bernanke's comments," said Standard Bank analyst Leon Westgate.
A weak set of manufacturing data from top metals consumer China also weighed on prices.
The preliminary HSBC China Manufacturing Purchasing Managers' Index fell deeper into contraction territory, to a nine-month low, in June. Copper is widely used across industries in products including consumer electronics, wiring and piping, making market prices sensitive to such data.
"At this point, it is difficult to get too excited about any of the metals, as most seem to clearly influenced by the slowing growth trends in China," said INTL FCStone analyst Edward Meir.
"Having said that, price levels are now certainly low enough to prompt more cutbacks on the supply side of the equation, particularly in aluminum, nickel and zinc, the three metals we think are saddled with the most excess."
LME three-month nickel closed 3.5 per cent lower at $US13,700 a ton Thursday, while zinc was down 1.6 per cent at $1,830 a ton.