Copper futures in New York closed down and near session lows on Wednesday as the market sold off on speculation of an end to the 10-day work stoppage at Chile's Escondida copper mine, sources said.
"It looks like they are coming to end to the strike in Chile. We seemed to trade lower after the news came out that the workers there lowered their demands for a raise, so I think that was the impetus for the selling," said David Meagre, metals analyst with Alaron Trading.
Copper for September delivery ended down 5.75 cents to $3.47 a lb on the New York Mercantile Exchange's Comex division, just off the bottom of its $3.46-$3.5550 trading band.
Technicians noted that given the weaker settlement on Wednesday, there was the opportunity for further declines in the near-term but at this point, there has not been a major break of support.
"The market right now is viewing that $3.40 level, basis September copper. A settlement below that price could certainly lead to a much larger sell-off," said one.
December copper slipped 6.25 cents to finish the day at $3.4270, moving between $3.4250 and $3.51. Spot August lost 6.25 cents, ending at $3.4950.
Comex final copper volume was estimated at 20,000 lots, versus on Tuesday's official count at 11,461 lots.
Escondida, majority owned by global miner BHP Billion, said on Wednesday it is losing up to $16 million net profit a day on average due to the strike.
A tame reading of US inflation gave the copper market a little boost in the day as the data reinforced market views that the Federal Reserve may not need to raise interest rates further to ward of pricing pressures.
Government data showed the core consumer price index, which strips out volatile food and energy prices, rose 0.2 percent in July, below the median forecast of a 0.3 percent rise in a Reuters poll.
Separate reports showed that the pace of US home building fell more than expected and industrial production undershot forecasts in the same month, adding to a view that the US economy is slowing.
New York, the euro was up 0.5 percent against the dollar at $1.2853 from about $1.2790 where it was shortly prior to the inflation data.
A softer US dollar generally creates a buying opportunity for overseas investors of dollar-denominated assets like copper.
Looking at supply, London Metal Exchange (LME) inventories rose 475 tonnes to 113,725 tonnes on Wednesday, while Comex inventories were flat at 6,756 short tons as of Tuesday.
LME three-month copper settled up $50 at $7,700 a tonne, after touching an intrude low at $7,525.