Copper fell on Thursday as demand prospects dimmed due to the protracted eurozone debt crisis, although hopes that political deadlock in Italy and Greece may be easing kept falls in check. Zinc, tin, lead, also fell but, like copper, ended off the lows, along with world stocks and the euro, as Italian bond yields eased from levels seen as unsustainable, prompting investors to take on some risk.
Nickel and aluminium ended slightly firmer. Italy moved closer to a national unity government on Thursday, following Greece's lead in seeking a respected European technocrat to pilot painful economic reforms in an effort to avert a eurozone bond market meltdown.
"The firmer equity markets and the weaker US dollar is limiting the price fall in base metals. Base metals are cyclical commodities, if the economy is deteriorating you are better off with other commodities, probably gold," said Commerzbank analyst Daniel Briesemann.
Three-month benchmark copper on the London Metal Exchange fell to an intraday low of $7,357 per tonne, the lowest since October 24. It was last bid at $7,475, down from Wednesday's $7,621 close. Copper prices have fallen about 22 percent this year. A flurry of figures on Wednesday showed that China's factories are bearing the brunt of a modest economic slowdown even as consumer spending and investment in assets such as roads and other infrastructure remain resilient.
By contrast, numbers on Thursday showed the country's copper imports rose for the fifth straight month in October, though a fall in iron ore shipments highlighted the risks for raw materials linked to real estate. "If you look at the data from China for copper, and for aluminium, it's pretty good numbers," said Standard Chartered analyst Dan Smith. "The fabricated side of it is doing well, the imports of copper were very strong, and the physical market is very tight."
Also helping copper, union workers at Freeport McMoRan Copper & Gold Inc Grasberg copper mine in Indonesia said on Wednesday they could extend their strike by another month, which would make it the longest mining stoppage in the country's history. "We would emphasise that physical markets have remained tightly supplied despite some moderation in activity," Credit Suisse said in a note. "This is mirrored in sizeable outflows of exchange inventories across most metals recently."
Copper inventories continued to fall, and were down 2,125 tonnes, at 410,025 tonnes, latest data showed. Stocks of aluminium shed 4,050 tonnes to 4.53 million tonnes, and are at around the lowest since August. Three-month aluminium ended at $2,140 per tonne from $2,125 at the close on Wednesday. Zinc closed at $1,885 from $1,934, and tin ended at $21,205 from $22,000, having fallen nearly 6 percent earlier. Lead ended at $1,943 from $1,978, and nickel closed at $18,150 from $18,050.