Copper recoils on Chile mine deal, firmer dollar
- Losses were modest, however, after US lawmakers approved a $1 trillion infrastructure spending bill
- Copper has pulled back from a record peak of $10,747.50 touched in May, but is still up 22% so far this year.
LONDON: Copper prices retreated on Wednesday, weighed down by a strong dollar and dwindling chances of a strike at the world's biggest copper mine.
Losses were modest, however, after US lawmakers approved a $1 trillion infrastructure spending bill.
Three-month copper on the London Metal Exchange gave up 0.7% to $9,450.50 per tonne in official trading after gaining 1.6% in the previous session.
"It's a mixed bag for copper with the infrastructure bill in the US creating a bit of excitement, but at the same time it looks like supply disruption risk in Chile is fading," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Demand doubts and dollar weigh on copper
"The market has run out of fuel to keep the rally going, but at the same time the market still believes in the long-term upside potential so that's keeping selling interest muted."
Copper has pulled back from a record peak of $10,747.50 touched in May, but is still up 22% so far this year.
The dollar struck a five-week peak against the yen ahead of US inflation data later on Wednesday, with a strong number potentially pressuring the Federal Reserve to wind back policy support.
A stronger dollar makes greenback-priced metals more expensive to holders of other currencies.
BHP Group Ltd and the union at its Escondida copper mine, the world's biggest, said they had reached a tentative deal for a new contract.
Copper gains as world's biggest mine prepares for strike
LME tin rose 0.8% in official activity to a fresh record of $35,350 a tonne while prices on the Shanghai Futures Exchange hit a record 239,870 yuan a tonne on tight supply.
ShFE tin stockpiles fell to their lowest since April 2017 while refined tin output from 20 Chinese smelters plunged 22.7% in July from a month earlier.
LME lead inventories fell to 57,850 tonnes, their lowest since July 2019, while ShFE lead stockpiles hit a record 181,391 tonnes by the end of last week.
LME aluminium added 0.1% to $2,577.50 a tonne, zinc advanced 0.9% to $3,027.50, lead gained 0.9% to $2,308.50 while nickel fell 0.3% to $18,902.
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