London Metal Exchange (LME) copper prices pared losses in the final floor trading session on Friday, but still ended sharply down from the day before as the market caved in under technical and fund selling, dealers said.
Three months prices ended at $3,835 a tonne, from $3,950 at the kerb close on Thursday, a day when the market hit a record high of $4,018.
"Expect increased volatility next week because that's the pattern of a market that can go anywhere by a hundred dollars in one (trading) session," a dealer said.
The price dropped to a low of $3,752 on Friday - more than six percent off the record high, and there was plenty of activity in electronic business on the LME's Select trading platform, with more than 6,000 lots traded.
The market first fell on fund selling, then briefly pared losses at midday, before finally resuming its way down after sell-stops were triggered below chart support around $3,785.
Dealers expected volatility to be exacerbated in the run-up to the annual LME convention, which begins in London at the end of the month, a hallmark of the market in past years.
"People have been spooked by copper prices with a four in front of them," said Gareth Roberts, head of trading at UK-based systematic trading fund Quality Capital Management (QCM).
And dealers seemed to agree. Strong fundamentals remain, with world stocks historically low and the LME premium commanded for prompt delivery just off $180 a tonne, they said.
Cancelled warrants, metal earmarked for release, now account for some 16 percent of total LME stocks.
"Price volatility can be expected to remain high given the broad range of views on copper's outlook," Barclays Capital said in a daily research note.
Copper's fall dragged most other metals, with aluminium down sharply and nickel hitting its lowest in 17 months.
Aluminium was at $1,929, from $1,975, while nickel was at $11,925, from $12,025. Zinc fell to $1,459, from $1,514, while lead was at $945, down $30. Tin was at $6,250, down $100.