Base metals decline

London Metal Exchange (LME) base metals closed lower after a volatile trading day on interest rates news flow and supply woes, dealers said.
"The very volatile market that we have seen during recent days reminds me of a casino," an LME trader said. "There has been speculative buying causing the volatility, but supply worries continue and of course, that matters when the metals are so scarce," he added.
Three-months copper closed at $7,055 a tonne, down $245, on Thursday and clearly off Wednesday's record of $7,385.
"Increasingly, market participants have taken to the sidelines concerned by widening bid/offer spreads and extreme volatility," a UBS report said on Thursday.
"This, in turn, has only worsened already illiquid trading conditions making price moves very unpredictable and choppy in nature."
The shortage of copper caused concern, dealers said.
The Chilean government said that it produced 440,412 tonnes of copper in March, down 1.4 percent from the same month last year.
Meanwhile, unrest at various mines continued.
On Thursday, around 300 workers at the Lomas Bayas copper mine in Chile, will decide whether to accept a pay offer from Canada's Falconbridge Ltd.
UBS analyst Robin Bhar said that a vote by Chilean copper workers on a pay offer could send the prices higher. "There is an important strike vote in Chile today and that could send prices straight back up to $8,000," he added.
Southern Copper Corp does not expect a quick resolution to a crippling mine strike in Mexico but forecasts strong results in the second quarter because of hedged copper production, the company said on Thursday.
Zinc closed down $160 at $3,200, after falling to an intra-day low of $3,115. The commodity complex was hit at midday after the Chinese decided to raise interest rates to 5.85 percent from 5.58 percent.
Aluminium ended at $2,747, down $91.
Aluminium recovered slightly from its day-low of $2,717, after US Fed Chairman Mr Ben Bernanke held his speech, indicating that there may be a pause in the US cycle of interest rates increases.
"The market is intrigued by Mr Bernanke, and they all try to work out how much further US interest rates might rise and when they might peak" John Kemp, analyst at SempraMetals, said.
"If you believe that interest rates are rising and might have quite a bit further to go, it is not necessarily too good news for base metals," said Sempra Metals economist John Kemp, adding that he didn't think it was going to prompt a sell-off just yet.
Nickel closed $850, lower at $18,800. Lead closed at $1,210/1,215 versus $1,220 and tin fell to $9,200/9,210 against $9,450.