Copper ticks higher, held back by wary Chinese buyers, inflation fears

Copper prices edged up on Wednesday after hitting a six-week peak on the previous day due to shortages outside the U.S. and sliding inventories, but gains were capped by resistance to higher prices in China and worries about inflation.

Benchmark three-month copper CMCU3 on the London Metal Exchange was up 0.1% at $13,894 a metric ton by 0930 GMT after hitting its highest in more than six weeks on Tuesday at $13,934.

Among other metals, LME aluminium CMAL3 gained 0.7% to $3,179 a ton, zinc CMZN3 advanced 0.9% to $3,585.50, lead CMPB3 added 0.5% to $1,877.50, nickel CMNI3 rose 0.3% to $17,135 and tin CMSN3 was up 0.4% at $54,100.

($1 = 6.7722 Chinese yuan)

"That it stalls ahead of $14,000 reminds us all that China is not a price chaser, but rather there on dips," said Alastair Munro, senior base metals strategist at broker Marex.

"The dollar's rally amid the rising crude price was some sort of overnight headwind with the rates markets also reflective of the resultant inflationary risks."

Oil prices rose to near six-week highs as hostilities escalated in the Middle East. O/R

The dollar index =USD advanced during the past four sessions, but was slightly weaker on Wednesday as traders weighed the possibility of Japanese intervention for its weak yen. FRX/

A firmer dollar makes commodities priced in the U.S. currency more expensive for buyers using other currencies.