Copper prices softened on Monday on light Chinese selling, but they remained in sight of a fresh all-time high of $5,276 hit last week, while zinc held firm.
Falling stocks and supply disruptions have sparked renewed fund buying in copper, which is expected to support the red metal, although some say decreasing Chinese imports and falling US new home sales could weigh on prices.
Easing supply fears, operations at Freeport-McMoRan Copper & Gold Inc's Grasberg mine in Indonesia were running as normal after a landslide last week, which had no impact on production, a Freeport official said on Monday.
"People are talking about the Freeport landslide causing some problems, but I doubt we will see much impact.
It's just news used to spike the market up.
Fundamentally I don't think there's much impact at all," a Singapore trader said.
Copper was quoted at $5,238/$5,245 a tonne, from $5,250 at the close on Friday.
On the Shanghai Futures Exchange, the most active June contract rose 0.51 percent to 48,970 yuan per tonne.
Falling London Metal Exchange inventories continue to bolster copper, used in electronics and construction, with stocks declining all last week to 124,800, against 800,000 tonnes a year ago.
Amid such fundamental concerns, traders say funds are likely to stay active.
"The funds are turning back to net longs. As long as the backwardation is there even though it is down a lot around $63/$73 but as long as it's there, the funds will be favourable on the long side, the Singapore trader said.
But some traders were eyeing US housing data and falling Chinese imports, which could eventually have an impact on copper, which has risen almost 20 percent this year.
"On copper, basically the fundamentals support it at the moment, but you've got to also take into consideration the housing market," Dominic Mound, a trader at ABN Amro in Sydney.
Sales of new US homes recorded their biggest plunge in nearly nine years in February, falling 10.5 percent, while prices dropped and the number of homes for sale hit a record high, signalling a significant slowdown in the housing market.
"Clearly there has to be some impact on the copper market with the new home sales on Friday being down 10 percent. If not actual material impact in terms of price, then psychological impact," Mound said.
He added that lower copper imports to China in February when many factories were closed due to the Lunar New Year holiday could have a negative impact on prices.
"The import figures being down 51 percent, whether or not they're on holidays, it's pretty horrific," Mound said.
China imported 53,495 tonnes of refined copper in February, down 51.1 percent from February 2005, official Customs figures showed on Monday.
Key three-month zinc held steady at $2,576/$2,586 per tonne, in line with the close at $2,580 and just below the all-time high of $2,587 hit last week.
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