US copper futures extended early declines on Friday following the dollar's rise when US consumer inflation jumped more than forecast, but after the initial reaction, traders said activity died down and prices stayed within a limited range.
They said a large build in London Metal Exchange stocks hit London copper, having a knock-on effect in New York trade. The dollar's advance on the euro, following a 0.8 percent rise in the November US consumer price index, its steepest increase in over two years, pushed copper down further.
"The dollar firming after the inflation reading had an effect after the open, but it's rangebound now," he added. Copper for March delivery was down 2.55 cents at $2.9355 a lb. It fell to a low at $2.92 on the New York Mercantile Exchange's Comex division following the CPI release, down from the session high at $2.98.
Surging energy costs boosted the CPI by more than analysts consensus forecast of 0.6 percent and up from October's 0.3 percent increase. With two jumps in key inflation readings in as many days, dollar buyers were betting that the Federal Reserve would most likely keep its US interest rate target steady. "Stronger-then-expected consumer inflation, producer inflation, import prices all show price pressures exist in the US People cannot be as confident as before that they'll see a January rate cut from the Fed," said Marc Chandler, senior currency strategist at Brown Brothers Harriman.
Later, a greater-than-expected 0.3 percent gain in November industrial production, up from forecasts for a 0.1 percent gain and a strong rebound from the 0.7 percent decline in October, provided support for copper prices.