Copper prices fell slightly on Tuesday as the dollar rallied against the euro on better U.S. retail sales data, but prices may rise on supply concerns from South America.

The dollar gained as much as 0.8 percent against the euro as retail sales rose unexpectedly in the month of April. The euro fell to a session low at $1.5431. Earlier the currency was trading at $1.5477 in New York.

The U.S. Commerce Department reported that overall retail sales dipped 0.2 percent last month. Yet, retail sales excluding autos, rose by 0.5 percent and sales at general merchandise stores posted a 0.5 percent increase compared to an increase of 0.1 percent in March.

Copper futures for July delivery settled down 1.8 cents or 0.48 percent to $3.7315 a pound on the Comex division of the New York Mercantile Exchange.

Copper futures were down as investors sold to buy dollars. Before today, copper gained about 23 percent this year as the dollar fell to a record low, increasing demand for commodities to compensate for inflation.

Worries on supply disruptions in Chile and Peru limited losses today. In Chile, the Supreme court ruled favoring Codelco on Monday, stating that the state-owned company did not have to hire thousands of subcontract miners.

The leader of subcontract workers reacted with a hunger strike and called thousand of external workers to be aware of new mobilizations, raising fears of further supply disruptions from the top world producer of copper.

Also in South America, Peruvian labor leaders suspended a potential strike that was planned to start on Monday affecting the mining sector.

Copper inventories monitored in the London Metal Exchange jumped 125 metric tones to 121,775 metric tons on Tuesday.

Copper futures for three months delivery were trading up $162.5 or 1.98 percent to $8,361.5 a metric ton on the London Metal Exchange.

Retail sales Copper Retail