LONDON: Copper prices lost ground on Friday as the dollar was underpinned by rising bets by investors the U.S Federal Reserve would tighten monetary policy faster than expected.
A surprisingly strong reading of US inflation this week boosted the dollar to its highest since July 2020, making commodities priced in the greenback more expensive to holders of other currencies.
An interest rate hike could trim liquidity in financial markets and slow recovery in the world's biggest economy.
"The dollar has been on a stronger rally since US CPI data release," said ING analyst Wenyu Yao.
Concerns over the financial health of China Evergrande , which made a last minute bond payment to avert default, and possible contagion to the rest of the property sector lingered and weighed on copper, Yao said.
Benchmark copper on the London Metal Exchange (LME) rose 0.2% to $9,613 per tonne by 1230 GMT, but still set to end the week nearly 1% higher.
Power Cuts: China's power curbs cut 7% of the country's annual aluminium production capacity, but only 1% of copper's, said consultancy firm Wood Mackenzie.
Inventories: Losses were cushioned by tight inventories in exchange warehouses.
On a weekly basis, Shanghai copper rose 1.5% to 38,037 tonnes and while on-warrant copper stocks climbed to 49,900 tonnes, inventories were still at historically low levels.
Premium: The premium of LME cash copper over the three-month contract was at $207 a tonne, compared to a record of $1,103.50 nearly a month ago.
Nickel: The anti-monopoly agency in Indonesia, which has banned exports of unprocessed nickel, is investigating whether domestic nickel smelters and a surveyor they hired engaged in unfair business practices that resulted in poor pricing of nickel ore.
Other Metals: LME aluminium rose 0.8% to $2,681 a tonne, zinc lost 0.8% to $3,254, lead shed 0.6% to $2,352, tin was up 0.6% to $37,920 while nickel was flat at $19,765.