Shanghai Futures Exchange copper slid 2.4 percent to 48,740 yuan ($7,095) a tonne on Wednesday shrugging off a stronger dollar and finding support from supply disruptions at the world's two biggest mines. Throwing up headwinds for commodities, the dollar firmed after Federal Reserve Chair Janet Yellen signalled a faster pace of US interest rate increases at her two-day testimony before Congress.
A stronger dollar tends to weigh on commodities by dampening buying power of those paying with other currencies. "Markets are likely to remain choppy as traders digest a more hawkish Fed with increasing supply side concerns," said ANZ in a report.
Prices powered through the $6,000-level on Friday after BHP Billiton declared force majeure on shipments from the Escondida mine, hitting their highest since May 2015 at $6,204 a tonne on Monday.
Escondida's workers and BHP said they had agreed to renew talks on Wednesday. Workers at the world's largest copper mine in Chile are digging in for a long strike, emboldened by new labour laws that are likely to result in tough wage negotiations in the industry in 2017 in one of Latin America's most free-market economies.
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