Base metals ended the week on an upbeat note on the London Metal Exchange (LME) on Friday, with prices flipping up in late trade on end-week position-squaring, traders said.
Nickel hit a new record high, amid news that a strike loomed at major Canadian producer Inco, zinc strengthened, due to more inventory declines, while copper edged cautiously higher, ahead of a long holiday weekend.
The LME is closed on Monday for a bank holiday and US markets are shut for Memorial Day. "We've seen some wide ranges again, and this has all the signs of a market that is still correcting," a fund source said.
Nickel's late flurry lifted prices to a final $23,000 a tonne, up $900, or four percent, from Thursday's kerb close.
The union said at Inco's Sudbury, Ontario facilities labour contract talks there have reached a stalemate and that a strike was imminent.
The current three-year agreement expires May 31. In 2005, the operations - mines, smelters, refineries and processors - produced 216 million pounds of nickel, which is mainly used in stainless steel.
Falling inventories were also supportive - LME stocks fell 246 tonnes to 18,432 tonnes, the lowest since October 2005, having been whittled down from over 37,000 tonnes in February.
Copper pushed higher in comparatively light trading, finishing at $8,230, up $140 from Thursday, when it rose $260. On May 11 copper hit a record $8,800 and since has traded in increasingly wide ranges, moving as much as 11 percent from day to day.
"There is still a wall of money out there that won't be put off by volatility. If a mutual fund decides to invest in commodities, it will invest," SGCIB analyst Stephen Briggs said,
Sentiment was also supported by stocks data which saw a 10,000-tonne rise in cancelled warrants to 17,525.
The New York Mercantile Exchange increased margins for its copper futures contracts for the second time this week the Shanghai Futures Exchange also raised margins for copper and aluminium.
But analysts said it was doubtful whether LCH.Clearnet, which clears LME contracts, would follow suit after raising margins for copper by 70 percent in mid-May.
Elsewhere, zinc motored higher, gaining $260, or nearly seven percent, to $3,770, within sight of the recent record high of $3,970. LME stocks continued to fall, down 1,075 tonnes at fresh five-year low of 242,025 tonnes.
Aluminium and lead eked out small-scale gains, finishing up $45 at $2,800 and $10 higher at $1,100 respectively.
Tin was 3.4 percent higher at $8,300, up from $8,025.