US copper gave up Wednesday's early gains after profit-taking and selling prompted by talks aimed at ending a strike by Peruvian miners who produce a third of the world's copper.
But a stellar report on US factories' performance in March -- coming on top of strong manufacturing data seen just a day before for April -- capped losses in the metal, which is used in a wide array of industrial applications. A sharp drop in copper inventories on the London Metal Exchange also soothed investors nerves, traders said.
Most-active copper for July delivery on the New York Mercantile Exchange's COMEX division was down 1.55 cents, or 0.4 percent, to a session low of $3.6000 a lb. by 11:20 am (1520 GMT). It had risen 1.3 cents, or 0.3 cents, earlier to a session peak of $3.6285.
On Tuesday, the contract had jumped 2 percent, lifted first by the strike in Peru, then driven up to one-week highs when US manufacturing data exceeded market expectations.
"We're off a little today because people are concerned that the labour issue in Peru might be resolved soon and that some of the premium we had loaded because of this over the last week may have to go," said a COMEX trader. Peruvian miners and government officials were planning to meet for intensive talks aimed at ending a nation-wide strike that entered its third day Wednesday. Copper aside, Peru is the world's No 3 zinc producer, No 5 for gold and is among the top two miners of silver.
Despite the bearish scenario posed to copper prices from an abrupt end to the strike, COMEX copper was holding reasonably well, thanks to the strong US factories data, traders said.
New orders at US factories rose a greater-than-expected 3.1 percent in March on a rise in civilian aircraft orders, but were also greater for the first time since December when transportation orders were excluded, a Commerce Department report showed on Wednesday. COMEX copper for May was down 2.85 cents to $3.58 a lb. after trading in a range of $3.6360 to $3.58.