LONDON: Funds cut bets on higher copper prices on Wednesday, driving the metal lower ahead of minutes from the Federal Reserve's last meeting which could boost expectations of higher US interest rates and a stronger dollar.
Benchmark copper on the London Metal Exchange, which hit a 21-month high above $6,200 a tonne earlier this month, was untraded in official rings and was last bid down 1.2 percent at $5,989 a tonne.
A higher US currency makes dollar-denominated metals such as copper more expensive for non-US firms, potentially weakening demand, although nervousness about supplies from top producers Chile and Indonesia are expected to support it.
A government-mediated meeting between BHP Billiton and striking workers at its Escondida mine in Chile failed on Monday.
Escondida has said it will not hire temporary staff to replace striking workers for at least 30 days into the stoppages.
"It's all about the disruptions in Chile and Indonesia, but we don't think it will have a lasting impact " Julius Baer analyst Carsten Menke said. "The assumption is that the strike at Escondida will be contained duration wise."
In Indonesia, Freeport-McMoRan has warned it could take the government to arbitration and seek damages over a dispute that has halted operations at Grasberg.
Along with the Philippines, Indonesia is also behind worries about supplies of nickel, which saw prices rise to two-month highs of $11,165 a tonne earlier this week.
The Philippines' has ordered the closure of 23 of the country's 41 mines on environmental grounds.
Although the Indonesian government in January eased a three-year ban on nickel ore exports, analysts say the rules accompanying the relaxation on using local smelter capacity to process low-grade ore may stymie some firms.
"It's creating a nickel ore deficit, not a refined metal deficit ... higher ore prices push up nickel pig-iron costs," Goldman Sachs analyst Max Layton said.
"We're bullish nickel here, but there are risks, the Philippines could water down the moves to close mines.
Nickel was down 0.7 percent in official trading at $10,775.
The other base metals were untraded in official rings. Aluminium was last bid down 0.5 percent at $1,877, zinc was down 0.2 percent at $2,869, lead was up 1.3 percent at $2,295 and tin was down 0.8 percent at $19,650.
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