LONDON: Copper prices lost most of their gains on Tuesday as the dollar strengthened after Federal Reserve officials warned that interest rates would have to remain firm for longer despite US data showing consumer inflation was easing.

Three-month copper on the London Metal Exchange (LME) was up 0.2% at $9,059 a tonne by 1700 GMT after rising as much as 1.3% in earlier trade.

US consumer prices data for January showed the smallest annual increase since late 2021, raising hopes of less aggressive interest rate hikes by the Fed, initially spurring a weaker dollar and a rally in metals.

Fed officials, however, warned that the central bank needs to prioritise quashing inflation over risks to growth and that rates may need to go higher than widely expected.

That helped to strengthen the dollar, making commodities priced in the US currency more expensive for buyers using other currencies.

Copper surged last month to a seven-month peak of $9,550.50 a tonne, largely on bets that the lifting of China’s strict COVID-19 controls would boost metals consumption.

LME aluminium dipped 0.1% to $2,410 a tonne after LME data showed more inflows into LME-approved warehouses, with inventories having shot up by 54% in about a week.

LME nickel shed 0.8% to $26,425 a tonne, zinc dipped 0.2% to $3,093 and tin retreated by 3.2% to $26,650, but lead added 0.1% to $2,099.