Copper ends lower

Copper ended lower on Friday, extending a phase of consolidation from this week's two-week highs, as investors continued to weigh the economic impact from Japan's nuclear catastrophe and a worsening debt crisis in Europe. A drop in US consumer sentiment to its lowest level in more than a year doused more cold water on the economically-sensitive industrial metal's mid-week surge, suggesting the recent rally was overdone.
"The market, near-term, is a little bit overbought and is not getting any good follow-through buying at all," said Sterling Smith, an analyst for Country Hedging Inc in St. Paul, Minnesota. London Metal Exchange (LME) three-month copper fell $30 to close at $9,685 a tonne. Despite the negative close, prices did manage to post their second straight weekly gain.
COMEX May copper dipped 0.55 cent to end at $4.4190 per lb, after dealing between $4.3990 and $4.4535. Trading volumes continued to slow as concern about a worsening debt crisis in Portugal following the collapse of the country's government, coupled with violence in the Middle East and northern Africa, and Japan's ongoing nuclear crisis, cloud the outlook for the global economic recovery.
COMEX copper futures volumes stood around 31,800 lots at 2:23 pm EDT (1944 GMT), almost 40 percent below the 30-day norm, Thomson Reuters preliminary data showed. "One of the key concerns is the ongoing sovereign debt crisis in Europe. We have already seen some downgrades, and there is speculation that Portugal is going to ask for a bailout," said Credit Agricole analyst Robin Bhar. Aluminium reached a 2-1/2 year high at $2,654.50 per tonne, before trimming gains to close at $2,641.
"The gains seen in aluminium are really more of a relative play in the market," said GFMS Metals Consulting Managing Director Neil Buxton. On Friday, data showed aluminium headline inventories fell 5,925 tonnes to 4,602,950 tonnes, but remain less than a percent from record highs. Analysts say there are around another 4 million tonnes being held off the LME.
The world's top aluminium producer, Russia's UC RUSAL, believes prices of the metal may reach $3,000 per tonne by the end of this year due to Japan and events in north Africa. In other metals, zinc ended $43 lower at $2,378 a tonne. Mitsui Mining and Smelting Co, Japan's top zinc smelter, said it would resort to imports of bare metal as its 110,000 tonne-a-year Hachinohe zinc smelter in northern Japan would probably remain shut for a while after the quake and tsunami damaged the facility.