Copper rose on Thursday due to some relief over new austerity steps pledged by Portugal and Spain to tackle their debt, but worries over the potential impact the plans will have on growth capped gains. Benchmark copper for three-months delivery on the London Metal Exchange closed at $7,160 a tonne from a close of $7,025 on Wednesday.
Last week, the price of the metal used in construction and wiring dropped to $6,632.75 a tonne, the lowest since mid-February. "I've never seen the market quite so undecided on its current short-term direction," said Alex Heath, head of base metals at RBC Capital Markets.
"It's like the hangover after a 10-year party...every country has an austerity plan (but) it's whether or not the belt tightening can be achieved under the administrations the governments have." On the plus side for metals were across the board falls in LME stocks save for lead. Copper stocks fell 1,225 tonnes to total 485,150 tonnes while cancelled warrants - material set to leave warehouses - rose to 19,525 tonnes from 17,000 on May 11.
Cancelled warrants in zinc rose 10,400 tonnes to total 25,125 tonnes or 4.41 percent of total stocks, up from just 1.1 percent at the start of last week. Overall zinc stocks remain near their highest since early 2005, however. Zinc ended at $2,160 a tonne from $2,100 but earlier hit a one-week high at $2,181. Battery material lead closed at $2,060 from $2,044, while tin ended at $17,800 from $17,725.
In other metals, nickel closed at $22,850 from $22,550 while aluminium ended at $2,170 from $2,128 after earlier touching a one-week peak at $2,180. Underpinning the two metals was news that South Korea had issued tenders to buy a total of 6,000 tonnes of primary aluminium ingot and 300 tonnes of nickel cathode. Also, aluminium stocks held at three major Japanese ports fell in April as companies likely ramped up production ahead of a long holiday period and mopped up excess inventories.