Copper steadied on Friday, retreating from a three-week high hit earlier in the day, as volumes waned ahead of a week-long holiday in top consumer China. Three-month copper on the London Metal Exchange (LME) ended at $5,740 a tonne, up just 0.07 percent on the day. The metal, used in power and construction, earlier touched a three-week intraday high of $5,793.50.
Trading volumes have tailed off as market participants in China wind down for next week's Lunar New Year holiday, with markets closed from February 18. "It is difficult to get fundamental views (on copper) given the fact that the markets in China are going to be closed," said Eugen Weinberg, head of commodity research at Commerzbank. "The outlook for demand in China (after the Lunar New Year) is still uncertain.
The recent trade data was extremely weak ... it was yet another sign of quite weak demand from China," Weinberg said. Although physical consumption has dimmed ahead of the holidays, traders said they were reluctant to short copper in case of a surprise interest rate cut by China's central bank, after a run of poor data.
"One of the classic seasonal dynamics, is that post-Chinese New Year there is a ramp up in buying specifically in metals like copper, so people are typically mindful of that as well as the slowdown during the Chinese New Year," said analyst Mark Keenan of Societe Generale in Singapore.
BHP Billiton said it expected to lose between 60,000 and 70,000 tonnes of copper output this financial year as a result of an outage at its biggest mill at its Olympic Dam operations in South Australia. That would wipe out more than a quarter of the year's surplus of 221,000 tonnes, according to a median forecast of analysts polled by Reuters last month.
Tin ended at $18,275 a tonne, up 1.53 percent. A quarter of Indonesia's tin smelters back a plan to suspend exports and prop up global prices, the chief of an industry body said today, ahead of a vote on the issue targeted next week. Lead ended at $1,849.50, up 0.85 percent; zinc closed at $2,150, up 0.19 percent; aluminium at $1,836.50, down 0.27 percent; and nickel closed down 0.54 percent at $14,625 a tonne.