Copper fell by over four percent on the London Metal Exchange (LME) at the close on Friday, taking the complex lower in nervous and very illiquid markets. "People are nervous, the markets are extremely thin and it has been relatively quiet," an LME floor trader said.
"Copper saw some late liquidation, there is some talk of the funds getting out, but we have to remember, these are still extremely high prices," another LME dealer said.
Copper closed at $7,035 a tonne against $7,360, down by 4.4 percent. On Thursday, the metal dropped 5.5 percent.
Copper prices have fallen by more than 10 percent this week but are still up more than 60 percent from the end of last year.
Floor traders were talking about more volatile trading in the days to come in illiquid markets due to the European summer season.
Analysts said current choppy trading - prices are swinging widely in both directions - reflects concerns about a slowdown in global economic growth despite tight supply and falling warehouse inventories in many metals.
On the supply side, labour talks between union workers at Teck Cominco Ltd's Highland Valley copper mine and the company are set to resume in mid-September, a union representative said on Thursday. "We believe that despite weakening US economic growth and the risks posed by rising oil prices, the metals rally has further to run. This is based on our belief that the market is underestimating the problems on the supply side," a Deutsche Bank weekly report said.
Workers at Chile's Escondida, the world's biggest copper mine, said late on Thursday talks continued with the company for a new contract but that they need a better offer to keep them at the table.
"Who knows what is going to happen at Escondida, it is an important mine and the contracts are running for a few years so it is not that simple to just pay the workers," the second floor trader said.
Nickel rose $200, to $23,600, aided by inventories falling 384 tonnes to 5,718 tonnes, the lowest since May 2005.
Further falls are likely, which will exacerbate nearby tightness - the cash/threes backwardation is a steep $2,450/2,500 a tonne.
Zinc fell to $3,080 from a previous $3,130, despite inventories dropping 2,050 tonnes to 196,650, a fresh low since April 2001. Lead was at $1,048, up $8.
Aluminium drifted to $2,450 from $2,505, with stocks at 732,875 tonnes, the lowest since February 2006. Tin was not traded, last quoted at $7,850/7,900 versus $8,100/8,200.