* Escondida, Grasberg outages offer support
* Upcoming U.S. Fed minutes spark some selling (Updates prices)
SYDNEY, Feb 22 (Reuters) - Copper prices slipped on Wednesday as some traders took profits and reduced their positions ahead of the release of U.S. Federal Reserve minutes that could push the dollar higher.
However, supply concerns limited the declines.
The Fed minutes due to be released later on Wednesday are a key focus for investors, as they could either reinforce or undermine recent hawkish comments from central bank policy makers.
The dollar index, which tracks the greenback against a basket of six major currencies, was last down slightly at 101.46 after hitting a six-day high of 101.600 overnight. A higher dollar raises the cost of dollar-denominated commodities, such as copper, for buyers that pay in other currencies.
Still, questions remain around global supply. Output is shut because of a strike at Chile’s Escondida mine, the world’s largest. Freeport-McMoRan and Indonesia are also battling over a government decision to forbid copper concentrate exports from the country.
“These concerns are well known, so the upside for now is probably limited,” said a trader in Perth, speaking under condition of anonymity. “But it’s still keeping a floor under the price too.”
In Chile, Escondida’s owner BHP Billiton and the striking workers met for government-mediated talks but the two parties did not commit to a schedule of new wage discussions. However, BHP did say it would not start replacing the striking workers for at least 30 days as a sign of its commitment to dialogue.
Meanwhile, Freeport-McMoRan has warned it could take the Indonesian government to arbitration and seek damages over a contractual dispute that has halted operations at the world’s second-biggest copper mine.
Three-month copper on the London Metal Exchange was 0.7 percent lower at $6,019 a tonne by 0700 GMT after dropping 0.2 percent the previous session.
Standard Chartered issued a revised average copper price forecast, putting copper at $5,900 per tonne in 2017.
The most-traded copper contract on the Shanghai Futures Exchange (ShFE) dipped 0.8 percent to 48,660 yuan ($7,074) a tonne, tempered by signs home prices in China are cooling.
China’s home price growth slowed for the fourth straight month as demand cooled further in the biggest cities, official data showed on Wednesday, signalling government curbs to defuse a bubble in the sectosar were starting to pay dividends.
Aluminium dipped 0.7 percent to $1,872 a tonne, extending overnight losses amid concerns that Chinese supply is rising. ShFE aluminium was down 2 percent.
Nickel traded steady at around $10,790 on Wednesday, down 0.6 percent from the previous session, after closing down 2.7 percent overnight. It rose to its highest since Dec. 19 on Monday, amid a mining crackdown in the Philippines.
Data from the International Nickel Study Group on Tuesday showed the market moved to a surplus of 9,700 tonnes in December from a deficit of 1,700 in November. For all of 2016, the market was at a deficit of 49,700 tonnes versus a surplus of 91,400 tonnes in 2015.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin
$1 = 6.8785 Chinese yuan Reporting by James Regan; Editing by Christian Schmollinger and Amrutha Gayathri