Copper fell on Thursday following a round of weak data suggesting US economic recovery could be stalling, a day after the base metal's biggest gain in two months. Three-month copper on the London Metal Exchange ended at $8,950 a tonne from a close of $9,061 a tonne on Wednesday. The metal used in power and construction rose more than $260, or some 3 percent on Wednesday, its biggest rise since March 17, as part of a commodity-wide rebound.
"It's a little bit disappointing there hasn't been much follow-through (from Wednesday's rally)," Standard Chartered analyst Daniel Smith said. Copper accelerated its fall after US data showed the number of Americans filing new claims for jobless benefits fell last week, but other numbers on home sales and regional factory activity suggested the economy remained on a moderate growth path.
The metal hit a session low of $8,918 a tonne in late afternoon London trading.
"We had a strong bounce yesterday, which means it's going to be a bit cautious now. You can't just dismiss the correction at the beginning of this month as simply a blip," said BNP Paribas senior metals market strategist Stephen Briggs. Rising copper inventories have also put pressure on the metal. The latest data shows stocks fell, but total inventories are within 1 percent of 10-month highs and are still up nearly one quarter this year.
Nickel stocks fell 48 tonnes and lead inventories were unchanged.
The International Nickel Study Group (INSG) reported a 6,000 tonne deficit in the refined nickel market for March, and the balance for the first quarter showed an 11,000 tonne deficit, helping to explain a drawdown in LME stocks, Credit Suisse said in a note.
"While this data reflects strong underlying demand, the longer-term outlook is characterised by some risks as the mine supply pipeline looks strong," Credit Suisse said.
Nickel fell to its lowest since December, closing at $23,555 a tonne. Lead ended at $2,473 versus $2,445 a tonne. The battery material was one of the biggest gainers among base metals on Wednesday.
LME stocks of aluminium fell by 2,050 tonnes, to come off a record high level of 4.71 million tonnes hit on Wednesday.
Cash aluminium to the three-month contract is now in a $17.50 a tonne contango, or discount, that could discourage deliveries to LME warehouses. Aluminium ended at $2,499 a tonne from $2,556 at the close on Wednesday. It earlier fell to its lowest since mid-March at $2,483.25 a tonne. Zinc ended at $2,135 a tonne from $2,188, and tin closed at $28,250 from $28,400 a tonne.