Copper falls as dollar rebound weighs on industrial metals

Copper prices receded on Wednesday, pressured by a rebound in the US dollar, which also weighed on the wider industrial metals complex. Benchmark three-month copper on the London Metal Exchange was down 0.53% at $14,338 a metric ton by 0700 GMT. The dollar index, which measures the greenback against a basket of currencies, recouped earlier losses and rose 0.16% to 102.07. A stronger dollar can weigh on industrial metals by making them more expensive for buyers using other currencies. Copper was also pressured by higher oil prices, which rose as the market weighed supply constraints from a storm heading for US oil-producing regions and attacks by Yemen's Iran-backed Houthis on Saudi Arabia. Rising oil prices have stoked inflationary pressures and concerns that policymakers would be forced to hike interest rates. Higher interest rates can weigh on demand for growth-dependent commodities like copper by dampening economic activity. Meanwhile, Asian stock softened on Wednesday, led by declines in AI-related stocks, paring gains from a rally earlier in the week that had supported copper prices. Copper has benefited from expectations of rising demand from the AI infrastructure buildout, alongside wider electric grid upgrades and electric vehicle sales. Elsewhere, workers at Chile's Centinela copper mine were set to strike after talks between two unions and Antofagasta Minerals broke down, adding to copper supply concerns. Aluminium nudged down 0.1% to $3,130.50 a ton, as the dollar gains offset supply risks tied to the heightened Middle East tensions. Still, prices for the metal used in construction, packaging and transport have fallen by more than 17% since hitting a four-year high in June, weighed by easing worries about supply from the Gulf region and expectations of new production capacity in Indonesia. Among LME metals, zinc lost 0.73%, lead dipped 0.27%, nickel lost 0.49% and tin dipped 0.27%. The Shanghai Futures Exchange was closed, and will reopen when China returns from National Day holidays on Thursday.