Copper fell on Thursday, reversing earlier gains, as a recovering dollar weighed and investors fretted about the size and shape of expected monetary easing in the United States, the world's largest economy. Benchmark copper for three-month delivery on the London Metal Exchange closed at $8,307 a tonne from $8,340 at the close on Wednesday.
"It's the dollar ... Everybody is convinced that there will be QE but it's the format and the actual size of it (that is uncertain)," analyst Andrey Kryuchenkov at VTB Capital said, referring to quantative easing.
On Tuesday, copper hit a 27-month high of $8,492 a tonne before falling after China surprised markets by raising interest rates for the first time in nearly three years. "All the things the (Chinese) government are doing have clearly helped to slow down the economy, but the data shows that growth remains solid and the market was expecting more," said Alex Heath, head of base metals at RBC Capital Markets. Battery material lead closed at $2,485 a tonne versus $2,450, after earlier touching its highest level since mid-January at $2,514.
Zinc hit $2,514.50 a tonne, its highest level since mid-April, but closed at $2,474 versus $2,440. China's production of refined lead and zinc hit records in September thanks to increased supplies of raw materials and expanded capacity, while monthly copper production rose 2 percent due to increased capacity. Aluminium closed at $2,364 versus $2,362. LME stocks for the metal, used in transport and packaging, fell 4,700 tonnes to 4.32 million tonnes - down from record levels above 4.6 million hit in January. A large portion of those aluminium stocks are tied up in finance deals. Steel-making ingredient nickel closed at $23,550 from $23,945, while tin closed at $26,500 from $26,750.