LONDON: Copper prices retreated on Thursday from session highs as the dollar climbed after strong inflation data from the United States raised the prospect that the Federal Reserve could delay interest rate cuts.

Three-month copper on the London Metal Exchange (LME) was last trading up 0.4% at $8,426.5 a metric ton as at 1416 GMT from an earlier $8,460. After the data, it dipped to $8,383.5 a ton.

“It edged lower immediately but went back up,” a trader said, adding that the copper market before the data had been positioned for US interest rate cuts. US consumer prices increased more than expected in December as rents maintained their upward trend, which could delay a much anticipated interest rate cut in March from the Fed.

Higher rates have strengthened the dollar, making dollar-priced gold more expensive for buyers holding other currencies. “US inflation came in slightly higher than expected, underscoring the fact that the job is not yet done for the Federal Reserve and that previously dovish language may have been premature,” said Lindsay James, investment strategist at Quilter Investors.

Abundant supplies of copper on the LME market have created a discount for cash copper over the three-month contract, which this week hit a record high of $108 a ton.

Elsewhere, lead touched an one-month high of $2,121.50 a ton on supply concerns during a seasonally strong demand period for the battery metal. It last traded at $2,115.5, up 1.5%.

China’s secondary or recycled lead production, accounting for half of total output, shrank to 342,000 tons in December, down 23% from the previous month, according to domestic pricing agency SMM.

In other metals, aluminium gained 0.2% to $2,237 a ton, zinc was up 0.7% at $2,513 and tin firmed by 0.7% to $24,576, while nickel was little changed at $16,445.

Prices of nickel, a key component of stainless steel, have come under pressure over the past year from growing Indonesian supplies and rising stocks in LME-registered warehouses.