Copper retreats from three week high

Copper pulled back from the previous session's three-week high on Friday as momentum sparked by a strike at one of the world's biggest copper mines, Indonesia's Grasberg, eased ahead of the long weekend break in China, the US and Britain. Freeport McMoRan Inc said on Thursday that mining and milling rates at Grasberg had been affected by an extended strike and that a "large number" of about 4,000 absentee workers were deemed to have resigned.
"The Grasberg news yesterday ... has now been factored in, so there's a bit of profit-taking, but copper should find good dip-buying support for the rest of today, given that it's a long holiday weekend," said Societe Generale analyst Robin Bhar. Dutch bank ING said in a note that Freeport has about 100,000 tonnes of copper stocks that could be used to meet demand in the near term.
The metal remains rangebound, Bhar said. "Although people are prepared to buy the dips, they're also prepared to sell the rallies," he said. "We need to get through overhead resistance and move above some of the longer term moving averages." London Metal Exchange copper closed at $5,657.50 a tonne, down 1.1 percent. Prices hit their highest since May 3 on Thursday at $5,768.50. Traders in China, the United States and Britain will be absent for national holidays on Monday.
Oil prices see-sawed on Friday after OPEC extended cuts in oil production but disappointed investors by not going further, while sterling slid after a poll showed the ruling Conservatives' lead shrinking two weeks before an election. LME nickel posted a 3 percent weekly loss after trade data this week showed that the Philippines is ramping up ore exports to China, fuelling oversupply concerns. Nickel closed up 0.4 percent at $9,075 a tonne.
Shanghai zinc inventories fell to their lowest in more than two years at 91,749 tonnes. Copper stocks in LME warehouses have edged lower over the past three weeks but remain 27 percent above levels a month ago. LME copper looks neutral in a range of $5,683 to $5,736 a tonne, formed by the 61.8 percent and the 76.4 percent Fibonacci retracements of the May downtrend, and an escape could suggest a direction, Reuters technical analyst Wang Tao said. LME aluminium ended the day down 0.4 percent at $1,952 a tonne, while tin was up 0.1 percent at $20,425. Zinc closed up 0.2 percent at $2,639 a tonne, while lead finished up 1.8 percent at $2,122.