BEIJING: London copper prices edged lower on Thursday, retreating from a seven-month peak hit in the previous session, as the dollar firmed after the Federal Reserve revived expectations for a possible U.S. rate hike this year.
A stronger greenback makes dollar-denominated metals more expensive for holders of other currencies and can weigh on prices.
Traders said the pullback appeared to be a normal correction after six straight days of gains for copper, although Shanghai prices rose again and hit their highest since Dec. 4.
"On the demand side, Chinese downstream companies increased their purchases (of copper) after Chinese New Year holidays," ANZ wrote in a note, highlighting supply issues in top copper producer Chile.
"Progress in US-China trade negotiations will dictate commodity markets," it added.
FUNDAMENTALS
* LME COPPER: Three-month copper on the London Metal Exchange slipped 0.3 percent to $6,387.50 a tonne, as of 0723 GMT, after hitting $6,426.50, its highest since July 10, on Wednesday amid tightening stocks.
* SHFE COPPER: The most-traded April copper contract on the Shanghai Futures Exchange rose for a sixth day, closing up 0.2 percent at 49,670 yuan ($7,408.90) a tonne.
* TRADE: The United States and China have started to outline commitments in principle on the stickiest issues in their trade dispute, marking the most significant progress yet toward ending a seven-month trade war, according to sources familiar with the negotiations.
* RISK: "Global risk remains buoyed by some positive trade war rhetoric and a general lack of negativity as more buyers than sellers remains the theme right now," brokerage Marex Spectron said in a note.
* FED: The U.S. Federal Reserve, in the minutes of its latest meeting in January, said the U.S. economy and its labour market remained strong, prompting some expectations of at least one more interest rate hike this year.
* USD: The dollar index nudged up 0.2 percent to 96.600.
* CHILE: Intense rains at the start of this month in Chile, the world's top copper miner, likely hurt productivity at state-owned miner Codelco's Chuquicamata and Radomiro Tomic mines, the country's mining minister said.
* OTHER METALS: London zinc was the worst performer in the LME complex, falling 1 percent, while aluminium was the only metal to climb, adding 0.5 percent.
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MARKETS NEWS
* Asian shares pulled ahead to fresh 4-1/2-month highs and U.S. equity futures rose on a Reuters report that the United States and China have started to tackle the stickiest issues in their trade war.
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