Copper prices ended up on Friday, consolidating higher in thin volumes with investors reluctant to push prices out of their ranges, traders said. Three months copper on the London Metal Exchange (LME) gained one percent to $3,086 a tonne from $3,053 after spending most of the morning drifting lower. "Trading was routine and investors seem to be content in hanging back for the moment," a trader said.
Despite the renewed strength, prices remained off Monday's three-week high of $3,120.
"Overall the markets continue to consolidate, but it seems as though copper and aluminium are the ones holding back the rest of the metals," William Adams, analyst with BaseMetals.com, said in a note.
"The others look ready to extend their gains...so if copper and aluminium start to gain momentum the others could have another run to the upside."
Stephen Briggs, metals economist with Societe Generale Corporate Investment Banking (SGCIB), said: "Clearly some of the markets are physically very tight, but there's also this brewing feeling that...momentum is starting to diminish."
The slowdown had kept activity by funds to a minimum throughout the week as they tried to gauge whether to reduce their exposure to base metals or not.
"That is why the direction of the dollar becomes so important," Briggs said, adding that Sunday's election in Iraq was also at the back of investors' minds.
The dollar slid after US economy figures showed weaker than expected growth, encouraging buying in dollar-traded commodities.
However, the dollar then rebounded on technical factors and remained in a $1.29-1.31 range against the euro.
Traders said the high backwardation in copper remained a concern. Cash-to-threes moved out to around $175 range, versus levels of around $170 on Thursday, which was the widest since April 2004 when the spread reached a peak of $185.
Aluminium was at $1,842, up $14, while zinc edged up $6 to $1,288.
Glencore's Portovesme ISF zinc smelter in Sardinia will halt operations and be put on standby in mid-February because of soaring energy costs, a union official said on Friday.
Lead added $7 to $932 a tonne, while nickel rose $25 to $14,425. Tin was unchanged at $8,000/025.