LONDON: Copper fell on Wednesday as profit taking set in after the metal rose to a two-month high above $6,000 a tonne on concerns over a looming strike at the world's biggest copper mine in Chile.
Also weighing on copper was waning optimism over US President Donald Trump's pro-business agenda and infrastructure spending plans, coupled with concerns over the negative impact of his populist policies.
"Investors might be viewing the (Chile strike) disruption as priced in. (Also) expectations for infrastructure spending in the US are overdone. If you build a highway in the states you don't need copper," said Norbert Rucker, head of commodities research at Julius Baer.
Three-month copper on the London Metal Exchange fell 0.6 percent to $5,949 a tonne by 1059 GMT, having earlier hit a two-month peak of $6,007. Trading activity was dampened by the week-long Lunar New Year holiday, which runs until Friday.
Workers at BHP Billiton's Escondida mine in Chile have voted to reject a wage offer and go on strike. The strike is due to begin in about 48 hours but the workers' union said the company will likely request government mediation to attempt a resolution, which would delay any strike action for about another week.
Escondida produced 1.15 million tonnes of copper in 2015, about 6 percent of the world's total.
"A potential 1 million tonnes of world output, or 5 percent of supply, may be at risk of disruption this year compared to 600,000 tonnes in 2016. Meanwhile LME on-warrant stocks have been declining," broker Marex Spectron said in a note.
The dollar recovered a little ground on Wednesday, after recording its worst start to the year in three decades on concerns the US was poised to ditch a two-decade old "strong dollar" policy.
A weak dollar makes dollar-priced metals cheaper for non-US investors. Elsewhere, industrial metals were broadly supported by news of steady manufacturing in top copper consumer China.
The official Purchasing Managers' Index (PMI) stood at 51.3 in January, compared with the previous month's 51.4. Zinc dipped 0.1 percent to $2,857 a tonne after hitting a two month peak earlier. LME zinc stocks are near their lowest level since June last year.
Aluminium dipped 0.4 percent to $1,812, while nickel was 1.4 percent firmer at $10,080 a tonne after rising by 3 percent overnight.
Some Philippine mines need to be shut given the environmental harm they have caused, the minister in charge of sector said on Wednesday, a day before the government announces the results of a review of the country's mines.
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