Copper fell more than 2 percent on Friday after two days of gains as some investors closed their positions ahead of a holiday in China next week and after US first-quarter growth numbers missed analysts' forecasts. Three-month copper on the London Metal Exchange ended down at $7,030 a tonne, after earlier reaching $7,258 a tonne, its highest since April 17.
US first-quarter economic growth expanded at a 2.5 percent annual rate but missed forecasts for growth of 3 percent and added to market concerns about demand following signs the economy has weakened in recent weeks. Market commentators said the data could provide ammunition for the Federal Reserve to maintain its monetary stimulus.
"We're still up across the board on the week," BNP Paribas analyst Stephen Briggs said. "There's also a lot of holiday next week in China, so there would have been some profit-taking." China's markets will be closed on Monday, Tuesday and Wednesday next week for Labour Day holidays.
Copper has rebounded from one-and-a-half-year lows at $6,762.25 a tonne reached on Tuesday. It was set to close the week up 0.5 percent but was still down 10 percent for the year, under pressure from rising stocks and poor economic data. "The (industrial metals) sector is well supplied, but there are initial signs of a pickup in physical consumption. At current price levels, most markets look undervalued (and) we think downside risks seem somewhat limited," said Credit Suisse in a note.
Indicating better on-the-ground demand in China, copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 2.9 percent or 6,483 tonnes from last Friday, the exchange said earlier. China consumes about 40 percent of the world's copper. Recent weak economic data have affected the market in two separate ways - capping gains due to uncertainty about demand from a sluggish global economy but also providing some support recently after signals that the European Central Bank could cut rates as soon as next week.
A rate cut by the ECB would not do much to pull the euro zone economy out of recession, a Reuters poll of 76 economists showed on Thursday. "Markets generally seem hopeful that policymakers will continue to ease, starting with the ECB next week," Standard Bank said in a research note. "The problem now is that a 25 bps cut seems so well discounted that it may well produce a negative response in risk assets - unless the ECB announces extra measures."
Nickel closed down at $15,200 a tonne from $15,440 at the close on Thursday, while zinc ended at $1,897 a tonne from $1,936. Lead closed down at $2,037 from $2,076.5 and aluminium at $1,878 from $1,942. World unwrought aluminium stocks were at 1.233 million tonnes in March versus a revised 1.289 million in February, International Aluminium Institute (IAI) data showed on Friday.
Tin ended down at $20,775 from $21,110.
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