BBL BHP Group Plc

By Katherine Dunn 

LONDON--Copper prices fell Friday to a one-week low, under pressure from a stronger dollar and profit-taking after supply concerns pushed the metal to 20-month highs earlier in the week.

The London Metal Exchange three-month copper contract was down 0.40% at $5,966 per metric ton at $5,966 per metric ton in midmorning European trading. The contract was down almost 2% for the week on Friday.

The WSJ Dollar Index, which weighs the dollar against a basket of other currencies, was up 0.12% on Friday. A stronger dollar makes dollar-denominated commodities more expensive for investors who hold other currencies.

Stocks were also pulling back on Friday, as investors questioned the pace of a recent rally, which pushed the Stoxx Europe 600 to its longest winning streak since 2013. That ended on Thursday.

The dip in copper comes amid a backdrop of supply concerns that has helped the metal gain more than 8% since the year began. In Chile, workers are striking at the Escondida mine, the largest copper mine in the world, over a pay and benefits dispute with management. The mine is majority-owned by BHP Billiton Ltd.

Earlier this week, the union said it would enter negotiations with management, which helped undercut expectations that the strike could be long.

"I think the market got a bit spooked when the workers said they would negotiate," said William Adams, head of research at FastMarkets in London.

Those negotiations have yet to begin and a time for them hasn't been agreed upon, according to a spokesperson for BHP. It is unlikely they will begin before Monday, the spokesperson said.

The Grasberg copper mine in Indonesia, owned by Freeport-McMoRan Inc. has also ceased production due to a disagreement between the company and the government over the granting of an export license.

Those supply jitters have helped fuel the rally and attract investors to the market, with open interest on the market hitting a historical high, said ING.

"With a number of events happening simultaneously in the copper market, specs have been attracted to copper, while producers are likely to have taken advantage of the market strength to do some pricing," ING said in a note.

But analysts have long warned that those gains could quickly deflate on signs of a resolution to the disputes at the Grasberg and Escondida mines.

The other base metals were mostly lower on Friday. Aluminum was down 1.47% at $1,876 per ton, lead was down 0.72% at $2,281 per ton, zinc was down 0.92% at $2,839 per ton and nickel was down 0.72% at $10,965 per ton. Tin gained 0.99% to $19,820 per ton.

Riva Gold contributed to this article.

Write to Katherine Dunn at Katherine.Dunn@wsj.com

(END) Dow Jones Newswires

February 17, 2017 06:39 ET (11:39 GMT)

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