Shanghai Futures Exchange copper slipped 0.3 percent to 36,270 yuan ($5,431) a tonne on Wednesday. Upbeat US data enhanced expectations of a near-term rate hike by the Federal Reserve, with a US payrolls report on Friday also in focus. A stronger dollar dents commodity demand by making the asset class less affordable for those paying with other currencies.
"The pullback in commodities is likely to continue in the short term with a stronger US dollar and weaker fundamentals reducing investor appetite," ANZ said in a report. China's zinc mine output climbed to 515,000 tonnes in June, up 11 percent year-on-year and a new record monthly volume, Standard Chartered said in a report. "Given how stretched investor positioning is to the long side in zinc, the increase in China's mine supply may catalyse some profit-taking. However, the broader fundamental trends suggest any such correction in price should be relatively shallow and short lived."
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