Copper rose on Friday, helped by a weaker dollar and signs of progress in negotiations to get funds to Greece, though gains were limited by concerns over weak demand, especially in top metals consumer China. The dollar hit a three-week low versus the euro, amid reports that the International Monetary Fund and the European Union had narrowed their differences over the Greek debt reduction target. A weaker dollar makes dollar-priced metals cheaper for European and other non-US investors.
Also helping copper was the latest survey of German companies by the Munich-based Ifo think-tank, which found firms were becoming more upbeat about the outlook despite the euro zone crisis. But gains were tepid for the red metal, due to weak demand in China, with the Shanghai Futures Exchange reporting earlier that copper inventories in its warehouses rose 1.2 percent from last Friday. Also, copper stocks in China's bonded warehouses hit a record high of over one million tonnes late last week and inventories are expected to rise by around 100,000 tonnes by the end of the year due to weak domestic demand.
"Global risk appetite is muted and China has been building inventory across a number of markets, highlighting lacklustre demand," Standard Chartered analyst Dan Smith said. Three-month copper on the LME ended up 0.70 percent at $7,777 per tonne, from Thursday's close of $7,715. The metal was still on track for a quarterly loss, however. Volumes were modest after Thursday's Thanksgiving holiday in the United States, with copper trading just over 9,946 lots by 1538 GMT.
Next week, the copper industry meets in Shanghai during Asia Copper Week, as Chinese buyers hammer out terms with Chile's Codelco and BHP Billiton, among others, for 2013 term shipments and processing fees. Traders say Chinese buyers and smelters have a stronger hand this year, given slowing demand and rising supply. In term talks this year, Codelco has offered Japanese copper customers a 2013 term premium of $85 a tonne, down 9 percent from its 2012 premium, reflecting a slowdown in demand in Japan and the global economy.
Tin closed up at $20,850 a tonne from a last bid of $20,455 on Thursday, while zinc, used in galvanising, ended up at $1,961 a tonne from a close of $1,925, having hit its highest since mid-October at $1,967 earlier. LME data showed 35,700 tonnes of zinc were booked to leave warehouses in Antwerp, where there is a multi-month queue to withdraw metal. Only 7,150 tonnes out of 163,150 tonnes of zinc in that location is on warrant or available.
Battery material lead closed up at $2,195 a tonne from $2,165, having earlier hit its highest since November 9 at $2,213. Aluminium closed up at $1,983 a tonne from $1,944.50, and nickel ended up at $16,620 a tonne from $16,550. LME data showed aluminium stocks hit a new record high of 5.177 million tonnes after large deliveries into Vlissingen, where there is a costly queue of around a year to withdraw metal. In lead, data showed a large 18,525 tonnes booked to leave warehouses in backlogged Antwerp, meaning lead supplies in an already tight market will be even harder to come by.