Copper edged up Friday, bouncing off the day's lows as the dollar weakened and investors digested mixed data from the world's biggest economy, while concerns about Chinese demand kept sentiment in check. Three-month copper on the London Metal Exchange closed at $9,650 a tonne from $9,620 at Thursday's close. The metal used in power and construction hit a record high of $9,754 a tonne on January 4.
Copper was dented earlier by monetary tightening measures from China, but turned slightly positive as the dollar weakened after a slew of data, making metals cheaper for non-US investors. "I'm a bit cautious, some of these metals look a bit stretched at these levels," BNP Paribas analyst Stephen Briggs said. "Demand in the real economy is a little on the soft side at the moment." Stocks of copper in London Metal Exchange fell 1,125 tonnes to 376,225 tonnes.
Since December 9, they have risen about 30,000 tonnes, raising some concerns about demand. However, analysts underlined that stocks were down 30 percent since they hit a 6-1/2 year high in mid-February 2010. As stocks have climbed, recent worries about nearby supply have eased, and so too, for now, has the premium for cash copper over the three-month contract at $7.50 a tonne. Supply worries had pushed the backwardation to around $70 a tonne in mid-December. Aluminium stocks continued to rise and last reached 4,435,000 tonnes. Aluminium closed at $2,472 from $2,482 a tonne.
Zinc closed at $2,457 from $2,462 a tonne while battery material lead was at $2,678 from $2,635 a tonne. Tin was at $26,850 from $26,850 a tonne. Nickel closed at $25,875 from $25,550 a tonne, holding near its highest since May 2010. "...We feel there may be more on the downside in the near term, although US data could once again attract the buyers if the data is good," William Adams, analyst at Basemetals.com said in a note.